GOOD PRACTICE GUIDE

FOR

SEA CONTAINER CONTROL

 INTRODUCTION

In order to be in a position to accommodate the increasing flow of goods at

seaports, the world of transport is constantly seeking appropriate and more
speedy means of transport. Transport by container is a typical example of this.
This development poses additional problems for the customs administrations.
Controls on the movements of goods are strongly influenced by this and
become, logically, much more complex. These problems find a partial solution
in the application of simplified procedures at departure and arrival.

This development also makes fraud easier, especially with regard to fiscal,
restricted and prohibited goods. Preventive and specialised search techniques
consequently become a necessity.

This module was written with this in mind. Besides effective customs controls,
aimed at preventing fraudulent practices, we will attempt to explain the basis
and the technical aspects of transport by container. Customs officers will then
have a better view of the organisation of transport by container and the methods
used by organisations intent on fraud.

The module has been prepared in loose-leaf format to facilitate easy amendment
and updating. If you have any comments, questions or suggestions on the
content of the module please forward them to:

European Commission
DG TAXUD
Unit D/1
Rue Montoyer 51
B1049 Brussels
Belgium

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 TABLE OF CONTENTS
INTRODUCTION

CHAPTER 1: GENERAL APPROACH TO CONTAINER CONTROL

Part One: Marine transport by container

1.1 General economy of transport by container
1.1.1 Definition
1.1.2 Advantages of containerisation
1.1.3 Limits of containerisation
1.1.4 Volumes of trade by container
1.1.5 Volume of the stock of containers
1.2 General information on containers
1.2.1 The various types of container
1.2.2 The dimensions of containers
2.3 The structure of the container
1.3 Approval of containers
1.3.1 Safety approval
1.4 Marine transport of the container
1.4.1 General
1.4.2 The various types of container ship
1.4.3 Cross-section of a container ship
1.4.4 Stowing the containers
1.4.5 Securing the containers on board
1.4.6 Location of containers on board
1.5 The organisation of international container transport
1.5.1 Movement codes
1.6 Documents
1.6.1 The contract of carriage
1.6.2 The charter party
1.6.3 The bill of lading
1.6.4 The manifest
1.6.5 The CMR
1.6.6 The international consignment note (C.I.M)
1.7 Participants
1.8 Liaison with other authorities
1.9 Storage at the port and stuffing
1.9.1 Container Freight Station (CFS)
1.9.2 Stuffing the container
1.10 Costs
1.10.1 Passage of a container through a port
1.10.2 The Customs control decision
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 Part Two: The selection of containers
1.11 The reasons for control
1.11.1 Smuggling
1.11.2 Container theft + Manipulation of seals and/or
Locking Mechanisms
1.11.3 Commercial fraud
1.11.4 Random selection
1.12 The selection criteria
1.12.1 Fraud indicators
1.12.2 Risk indicators associated with the goods
1.12.3 Risk indicators associated with the operators
1.13 Information Sources

Part Three: Control

1.14 Choice of location for carrying out controls
1.15 Examination of the container
1.16 Control methods

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CHAPTER 2: HEALTH & SAFETY
2.1 General
2.2 Roles & Responsibilities
2.2.1Individual
2.2.2Operator
2.2.3Managerial
2.2.4Duties and Responsibilities
I. Team Member
II. Team Leaders
III. Functional Manager
2.2.5 Resources available for Help and Advice
I. External
- Park/Quay Controller or Shed Foreman
- Port Emergency Services
II. Internal
- Health and Safety Advisers
- Firearms and Explosives
- CITES
- Environmentally Dangerous Goods
2.3 Radiation
2.4 Law & Regulations
2.5 Types of Operations
2.5.1 Quays
2.5.2 Parks
2.5.3 Sheds
2.6 Port Area Hazards & Controls
2.7 X-ray Scanners
2.8 Examining Containers & Trailers
2.9 Clothing & Equipment
2.10 Risk Assessment
2.11 Forms/Procedures

Annex: Dangerous Goods Labels

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CHAPTER 3: CONTAINER SPECIFICATION.

Part One: Types of Containers

3.1 General Information
3.24 External and Minimum Internal Dimensions
3.25 Internal Dimensions
3.26 Maximum Gross Weight
3.27 Floor loads
3.28 Concentrated loads
3.29 Gooseneck Tunnel on 40’ Container
3.2 Structures
3.3 General Purpose Container 20’
3.4 General Purpose Container 40’
3.5 High Cube General Purpose Container 40’
3.6 Hardtop Container 20’
3.7 Hardtop Container 40’
3.8 Open Top Container 20’
3.9 Open Top Container 40’
3.10 Half Height Open Top Container 20’
3.11 Flat 20’
3.12 Flat 40’
3.13 Platform 20’ + 40’
3.14 Ventilated Container 20’
3.15 Insulated Container – Porthole Type 20’
3.16 Insulated Container – Porthole Type 40’
3.17 Construction of Insulated Containers
3.18 Refrigerated Container 20’
3.19 Refrigerated Container 40’
3.20 High Cube Refrigerated Container 40’
3.21 Construction of Refrigerated Containers
3.22 Bulk Container 20’
3.23 Tank Container 20’

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 Part Two: Coding, Identification and Marking of Container
3.24 General
3.25 Identification System
3.26 Determination of Check Digit
3.27 Shippers Own Containers
3.28 Country Code
3.29 Size and Type Code
3.30 Operational Marks
3.31 Customs Approval Plate
3.32 CSC Safety Approval Plate
3.33 Terminology
3.33.1 General
3.33.2 Rear End of a Typical Container
3.33.3 Base Structure of a Typical Container
3.33.4 External View of Refrigeration Unit
3.34 Places of the Different Marks & Numbers on Containers

Part Thee: Approved Methods of Repair

3.35 Corner Posts
3.35.1 Limitations on Insert in the Outer Profile of
a Rear Corner Post
3.35.2 Limitations on Sectioning of Rear Corner Post
Outer Profile
3.35.3 Typical Acceptable Corner Post Inserts
3.35.4 Not Acceptable Repairs
3.36 Rails
3.36.1 Limitations on Rail Inserts and Sections
3.36.2 Top Rail Insert and Section Limitation
3.36.3 Cross Section of Top Rail (Before Welding)
3.36.4 Examples of Acceptable Bottom Rail Inserts as
Cross Sections through the Rail Profiles
3.37 Flooring
3.37.1 Limitation applying to Floor Repairs (Partial or
Complete replacement)

Annex: Decoding of Containers Owners

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CHAPTER 4: TYPES OF FRAUD & TRENDS

Part One: Types of Fraud

4.1 General
4.2 Smuggling
4.2.1 High-Duty Goods
4.2.2 Goods Subject to Prohibitions, Restrictions or
Other Measures
4.2.3 Endangered Species
4.2.4 Copyright
4.3 Undervaluation
4.4 Overvaluation
4.5 Underdeclaration of Quantity
4.6 Overdeclaration of Quantity
4.7 Misdescription of Tariff Clasification
4.8 False Declaration of Origin
4.9 False Licences, Permits and Health Certificates
4.10 False Declaration of Destination(or End-User)
4.11 CAP Fraud

Part Two: Trends

4.12 General
4.13 Cigarettes
4.14 Alcohol
4.15 Stolen Vehicles
4.16 Counterfeit
4.17 Endangered Species
4.18 Weapons & Military Equipment
4.19 Heroine
4.20 Cocaine
4.21 Cannabis
4.22 Precursors

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CHAPTER 5: SYSTEM AND METHOD OF EXAMINATION
5.1 General
5.2 Health & Safety
5.3 Examination of Containers and their Contents
5.4 Examine of Exterior of the Container
5.5 Examine of the Goods
5.6 Examine of Internal Side of the Container
5.6.1 Floor
5.6.2 Roof and Walls
5.6.3 Bulkheads
5.6.4 Refrigerated Containers and Refrigerated Units
5.6.5 Tankcontainers
5.7 Action if Irregularities are detected
5.7.1 The Aim
5.7.2 Transportation to Secure Storage
5.7.3 Security of the Operation

CHAPTER 6: CONCEALMENT METHODS

6.1 Types of Concealments
6.2 Concealments using the Normal Construction of the
Containers
6.3 Concealments Using False Bulkheads, Roofs and Floors
6.3.1 Bulkhead Concealments
6.3.2 Roof and Floor Concealments
6.4 Concealments within the Cargo inside the Container
6.5 Rip-Off

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 CHAPTER 1

GENERAL APPROACH TO
CONTAINER CONTROL

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 Contents

Introduction

Part One: Marine transport by container

Section I: General economy of transport by container

1.1 Definition
1.2 Advantages of containerisation
1.3 Limits of containerisation
1.4 Volumes of trade by container
1.5 Volume of the stock of containers

Section II: General information on containers

2.1 The various types of container
2.2 The dimensions of containers
2.3 The structure of the container
2.31 The framework
2.3.2 Cover
2.3.3 Access

Section III: Approval of containers

3.1 Safety approval

Section IV: Marine transport of the container

4.1 General
4.2 The various types of container ship
4.3 Cross-section of a container ship
4.4 Stowing the containers
4.5 Securing the containers on board
4.6 Location of containers on board

Section V: The organisation of international container transport

5.1 Movement codes

Section VI: Documents

6.1 The contract of carriage
6.2 The charter party
6.3 The bill of lading
6.4 The manifest
6.5 The CMR
6.6 The international consignment note (C.I.M)
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Section VII: Participants

Section VIII: Liaison with other authorities

Section IX: Storage at the port and stuffing

9.1 Container Freight Station (CFS)
9.2 Stuffing the container

Section X: Costs
10.1 Passage of a container through a port
10.2 The Customs control decision

Part Two: The selection of containers

Section I: The reasons for control

1.1 Smuggling
1.2 Container theft
1.3 Commercial fraud
1.4 Random selection

Section II: The selection criteria

2.1 Fraud indicators
2.2 Risk indicators associated with the goods
2.3 Risk indicators associated with the operators

Section III: Information Sources

Part Three: Control

Section I: Choice of location for carrying out controls

Section II: Checking the container

Section III: Control methods

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 Part one

SEA TRANSPORT BY CONTAINER

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Section I
General economy of transport by container
1.1 Definition
A "container" is a piece of transport equipment that is permanent in character,
and consequently sufficiently strong to allow repeated use, specially designed to
facilitate the transport of goods, without disturbing the contents, for one or more
modes of transport. It is designed to be secured and/or handled without
difficulty, corner fittings being envisaged for this purpose.

1.2 Advantages of containerisation

- Speed: for customers as well as for shipowners, time lost by the breaking of
bulk can be reduced to a minimum.
- the simplification of customs formalities, since the container constitutes a
documentary unit. In this case, is stuffed under surveillance of the customs
authorities and sealed. It must not show any sign of being broken into.
- savings in terms of packaging (equipment, time). The loading of a FCL (full
container load) benefits from a rebate. For the shipowner the saving is in
terms of the yield of the ship. The customer will have goods (and therefore
capital) immobilised over a shorter period. Insurance is less expensive.
- Flexibility of supply: speed is uniform; from the time the goods are loaded
into the container, they are travelling until they are unloaded from it;
- Storage flexibility: the container can serve as a storage unit.
- Security: the container will protect the goods against bad weather, even
during handling. It reduces theft, deterioration and losses.

1.3 Limits of containerisation

Goods must be of a type that can benefit from the advantages of
containerisation. That means costly traffic which needs to be protected from
breakage, theft, etc... But it seems today that these limits are increasingly
theoretical. The only limit today is practical in nature: the characteristics of
goods have to correspond to those of a container (weight/volume/dimensions) to
achieve an optimum load factor. But certain suppliers already adapt their
products (and their packaging) to containerisation, or containers to products.

1.4 Volumes of trade by container

World port traffic in 1996 exceeded 140 million twenty-foot equivalent units a
year. It should be noted that a third of this traffic takes place in the world's seven
main ports.
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 1.4.1 The estimated figures in EUROPE
Anticipated developments in container traffic by 2005 (in thousands of twenty-
foot equivalent units) appear hereafter:

Geographical area 1994 2000Variation 2005 Variation

1994/2000 1994/2005
North Sea Ports 12 555 17 958 +43% 25 156 +100%
Scandinavia 2 247 3 647 +62% 5 674 +152%
Great Britain/Ireland 5 355 7 103 +32% 10 062 +87%
Atlantic coast 1 489 2 022 +35% 2 657 +78%
The Western 5 218 7 465 +43% 10 062 +88%
Mediterranean
The Eastern Mediter- 3 413 4 817 +41% 6 608 +93%
ranean and Black Sea
TOTAL 30 278 43 014 +42% 59 981 +98%

According to these figures the principal increases in traffic are expected in the
northern part of Europe. The North Sea ports consolidate their first place,
maintaining their share of traffic at around 42% by 2005. One can also see the
appreciable increase in traffic in the Eastern part of the Mediterranean and in the
Black Sea.

It is clear that criminal organisations may find it beneficial to take advantage of

this expansion of containerised transport to organise their fraud.

1.4.2 The criminal economy

- turnover of the Italian mafia organisations: 39 billion € (source: Palermo

anti-mafia prosecution authority)
- turnover of organised crime in the USA: 1.1% of the GNP (source: Wharton
Econometric Forecasting Associates)
- trafficking of animals: 15 billion € (source: WWF)
- counterfeit medicines: 7% of the market (source: WHO)
- commercial counterfeits: between 3 and 9% of international trade (source:
Ministry of Finance)
- Community fraud (money diverted from the budget of the European Union):
10 to 15% of the Budget

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 1.5 Volume of the stock of containers
The world stock of containers is assessed at approximately 8 million containers.
The construction of containers is carried out in specialised factories, with 80%
of current production carried out in China. The average useful lifetime of a
container varies between 12 and 15 years. 10% of containers are repaired each
year.

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Section II
General information on containers

2.1 The various types of container

The basic container is the closed container with a boltable door with two flaps at
one end and securing rings inside (DRY CARGOCONTAINER)

It can have an open roof (OPEN TOP) to allow it to be loaded from the top or
conventionally by the back door. The roof may be covered by a tarpaulin.

The container can be ventilated mechanically and protected from moisture

(VENTILATED CONTAINER)

The refrigerated container allows the carriage of consumable goods under

refrigeration; it is equipped with a refrigerator power unit (electric or diesel) and
the means of temperature regulation and control (REEFER).

The HALF-HEIGHT container is designed for high-density goods; it has no

roof.

The PLATFORM CONTAINER is used for packages that do not fit the standard
gauge and can withstand moisture. It may have two folding end walls for
vacuum storage (FLAT TRACK).

The function of the tanker container (TANKTAINER) is to transport harmless

or dangerous (class 3) liquids or gases (under pressure). Depending on the
product, the equipment will be more or less full (relief valve)

The dry bulk container avoids the use of bags: it has covers on the roof, for
loading, and draining hoppers (in addition to the end doors). Protection against
condensation is reinforced by polyethylene sheets. It is used in particular for
exporting bulk sugar or malt. Other specialised containers exist for the transport
of live animals, cars, tobacco, etc.

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2.2 The dimensions of containers
The dimensions of containers are defined by international standards of the ISO
(International Standard Organisation), which also check the sealing and the
strength of the container as well as its registration. It is useful to know these
dimensions in order to be able to check the plausibility of the information on the
transport documents. These dimensions are expressed in feet. One foot measures
0.3048 m.

2.3 The structure of the container

The container has to protect goods from mechanical damage, atmospheric

conditions and the sea. It has to be robust, provide long service and be as light as
possible. In the event of damage, it should be able to be repaired anywhere,
without special equipment: it must be made of available materials. The resistant
structure has to absorb all the stresses to which such containers are subjected.

2.3.1 The framework:

This includes:
- a very solid underlying frame (members and cross-pieces); there are
openings for forks in the members;
- 4 lateral supports;
- a superior framework;
These elements are assembled by corner fittings of cast steel (Mac LEAN
Patent) which are essential for handling and securing (twist lock/ 1/4 turn
bolt)

2.3.2 Cover:
- Exterior: the sheet made of steel, often corrugated on the sides. Polyester
panels may be used.
- Interior: the floor is made of wooden slats and the remainder of plywood
(wedging the packages and reducing condensation). Aluminium is used for
isothermal or ventilated containers (more hygienic).

2.3.3 Access:
One door with two flaps at one end only or a side door (rail). It is locked by
means of 4 locking bars. It is possible to apply seals for transport under customs
control.

FOR MORE DETAILED INFORMATION PLEASE SEE CHAPTER 3

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Section III

Approval of containers
3.1 Safety Approval

The International Convention for Safe Containers (CSC) sets out rules, the aim
of which is to provide maximum guarantees for the safety of human life during
handling, stacking and transport of the container. This convention imposes on
container owners a regular fixed-date examination of containers (5 years after
construction, then every 30 months) and whenever they undergo major repairs.

This is explained in detail in CHAPTER 3

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Section IV

Marine transport of the container

4.1 General
Container ships are regular liners integrated into a uniform transport chain of
which they are the maritime link. They have to meet two essential requirements:

- large container capacity to satisfy the market and achieve the lowest possible
cost;
- imperative compliance with schedules to obtain the best performance from
the transport chain.

It was therefore necessary to build ships with a large container capacity,

constant cruising speed and a maximum breadth imposed by the Panama Canal.

4.2 The various types of container ship

- - The cellular container ship: has cells delimited by sliding partitions that can
be fixed or dismountable.
- The full container ship: transports only containers.
- The semi-container ship: conventional ship having one or two cellular holds.
- The carrying PC: the rear of the ship is reserved for roll-on roll-off
tweendecks, the front for cellular holds.
- The bulk container ship: the holds and the deck can accommodate containers.
- The panamax container ship: breadth less than 32.30 m.
- The open container ship.
- The overpanamax

For ships that do not use the Panama Canal, the breadth increases from 32.30 to
approximately 39m. Shipowners however awaited the end of the 1980s to take
this step. The dimensions of these ships are limited today by the length of the
berths in container terminals (300 m) and by the reach of handling gantries in
ports

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4.3 Cross-section of a container ship
The container holds occupy the space between the bulkhead in front of the
engine and the boarding bulkhead. A significant number of stiffeners and a
substantial ballasting capacity justify the use of a double hull. There are
numerous powerful mooring winches to avoid any displacement of the ship
during commercial transactions

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4.4 Stowing the containers
Containers are stowed longitudinally, the doors facing rearwards or towards the
middle of the bay. They can be stowed on deck or in the hold. The number of
40-foot cells in the hold is limited. 1/2-height containers have places reserved
forward, at the end of the hold. The deck will be reserved in general for the
strongest containers or for 20 foot containers (lighter and more speedily
handled). This is where refrigerated containers are also found (owing to the
presence of power points and the need for surveillance). The number of
"stacked" containers depends on their strength (between 6 and 9).

4.5 Securing the containers on board

The mechanical stresses to which the container is subjected during the transport
by sea are enormous: the container is subjected to static stresses caused by
securing and dynamic stresses caused by the movements of the ship at sea. As
the ship has a schedule to which it must operate, it chooses the shortest (not
always the calmest) route and except on safety grounds, there is no question of
reducing speed in bad weather.
4.5.1 In the hold
Containers are held in place, stacked up on top of one another (up to 9 high) in
cells consisting of 4 vertical sliding partitions fixed to the structure of the ship.
Intermediate platforms can be inserted at the sixth level so as not to exceed the
maximum load on the lower containers. The sliding partitions are widened at
bridge level to facilitate loading.

4.5.2 On deck
Traditional method: Containers are held in place by more or less elaborate
securing equipment: on the bridge (and panels): anchoring shoes designed to
accommodate the corner fittings of the containers and loop fittings or securing
parts for fixing by chains or bars which are connected to the upper corner
fittings by hooks, "eyes" or horns. Securing is stiffened by "chain stiffeners",
"pawl" stiffeners or by turnbuckles or pneumatic or hydraulic jacks. Containers
are secured together by double or single cones, boltable or not.

4.6 Location of containers on board

The hold and the deck are divided into:
- BAYS,
- ROWS,
- TIERS, in order to locate precisely each container slot on the bridge or in the
hold.

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The BAY locates the container longitudinally. BAYS are numbered from front
to back.

The ROW locates the container transversally. Row 00 corresponds to containers

in the centre line of the ship. In the hold, there can be up to 9 rows, 12 on deck
(for a panamax).

The TIER locates the container vertically; numbering is from the bottom
upwards, usually using even numbers.

A container is therefore located in the ship's stowing plan by a series of 6 digits:

- The first two designate the BAY;
- The next two, the ROW;
- The last two, the TIER;

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Section V
The organisation of international container
transport
Containers are uniform equipment and can be transhipped without damage on
various means of transport: trains, lorries, barges and sea-going ships.

They consequently permit door-to-door transport without breaking bulk, the

container being stuffed in the shipper's factory and emptied directly in the
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consignee's facilities at the end of the journey. But its flexibility of use also
makes it possible to transport from a consolidation wharf to a bulk-breaking
wharf. The terms on which the container is made available vary according to
need. These variations are grouped under the "movement code" below.

5.1 Movement codes

FULL CONTAINER LOAD (FCL/FCL)
The shipper stuffs the container himself. Inland transport is taken care of by the
shipper (merchant 's haulage) or by the transport company (carrier' s haulage).
The container will not be opened until it is on the consignee's premises.

LESS THAN LOAD CONTAINER (LCL/LCL)

The shipper delivers his goods to a grouping centre. They are containerised with
other goods then the bulk is broken on arrival.

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Combinations of FCL and LCL are also possible:
- FCL/LCL: the shipper himself stuffs the container, the contents of which will
be de-consolidated among the various purchasers at the destination.

- LCL/FCL: the shipper has his goods and those of his subcontractors for
example delivered to the same stuffing location. They will then be conveyed to
the one purchaser.

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Section VI
Documents

6.1 The contract of carriage

Transport occupies a very important place in economic life, and particularly as
regards international trade. It can be carried out by the buyer or by the seller, but
because of the long distances to be travelled and the high degree of
specialisation of certain means of transport, a transport company will generally
be called in.

The agreement entered into between carriers and their principals constitutes the
subject of a contract of carriage, i.e., a contract by which carriers undertake vis-
à-vis shippers to deliver goods to an agreed location for remuneration. A
contract of carriage can relate to only one journey. However, they are generally
concluded for transport to be carried out on a regular basis, for a given period.
With regard to the transport of goods itself, a waybill is drawn up. As a basic
transport document, the waybill differs in form and content according to the
nature of transport (sea, waterway, air, rail or road).

The most important information to show on the waybill is:

- Details of the shipper, carrier and consignee
- Description of the goods (nature, quantity, packing)
- Transport charges and costs, as well as the person responsible for payment
thereof
- The general terms of transport (incoterms)

An outline of the characteristics and documents specific to the various types of

transport follows.

With regard to marine transport, the shipper must first rent the gross tonnage
from a shipowner or charterer. There are regular maritime shipping lines
(liners) and tramping lines, whose boats have to load and/or unload their cargos
at many places. Some big companies have their own ships for the transport of
their products (owner-operator).

- The Shipowner equips the ship (crew, equipment, fuel) and rents it out
- The charterer is an owner-hirer
- The Shipbroker puts the shipper and the charterer in contact with one
another

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6.2 The charter party
The contract of affreightment used in sea transport is called charter party. In
short it is contract hiring the ship, all or part of which can be hired.

In the majority of the cases (regular line services), no charter party will be
drawn up. In such cases, the terms of the freight agreement will appear on the
back of the bill of lading.

There are several kinds of charter:

- open charter: the port of destination is unknown (it will be notified in due
course)
- full charter: hiring the entire capacity of the ship
- partial charter: hiring part of the capacity of the ship
- temporary charter: for a given duration (charter-line)
- charter for a given trip (journey-charter) or for several trips (round-charter)
- unspecified charter: to load anything one wishes, against payment of a flat-
rate sum
- dry charter: the shipper equips the ship, including the crew and the provisions

In addition to the terms on which the contract of affreightment has been

concluded (written confirmation of the hire agreement), the charter party also
mentions:
- the goods to be transported
- the port of shipment
- the port of destination
- the freight charge (for example single price per cubic metre)
- the times of loading and unloading
- any demurrage days
- dispatch money (indemnity for speedy loading)

6.3 The bill of lading

The bill of lading (B/L) is the document whereby the captain certifies that the
goods are on board his ship. He commits himself to transporting and delivering
the goods at the port of destination in the state in which he took delivery of
them, to the person who presents him with the original B/L, (given initially to
the shipper). The bill of lading constitutes a contract of carriage, as well as proof
of receipt of the goods. Its main feature also consists however of its quality of
document of title. The B/L does not constitute in theory any right of ownership,
but rather a right of possession of goods. The bill of lading is established in a
number of originals and in a number of copies. Originals are reserved for the
consignees. To avoid their becoming lost, they are transmitted to beneficiaries
by various channels. The holder of the original B/L has the right of possession
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of goods. Copies are intended for the shipper, the shipowner and the captain
(captain 's copy). Since the original bills of lading give holders the right of
possession, they constitute negotiable instruments, i.e., during their journey, the
goods can be sold several times. In this case, the original documents have to be
given up (negotiable) and transmitted to successive owners.

All the copies are marked "non-negotiable copy". Each original states the
number originals drawn up. The bill of lading can also be:
to order: easily transferable by simple endorsement (the captain is obliged to
deliver goods to the last beneficiary),
bearer: easily transferable (dangerous if lost or stolen)
straight: only the recipient mentioned on the B/L is entitled to take possession of
the goods.

Bills of lading also contain provisions concerning the payment of transport

costs: freight payable at destination, freight prepaid, freight payable ship lost or
not lost.

Bill of lading
number

Shipper

Consignee

1st notify:
Shipping agent
at the port of
destination.
Name of
the Vessel
2nd notify Place of
Port of Loading Delivery
Port of discharge
Container
numbers and The weight
Original seals mentioned must be
rigorously exact

Nature of goods and

Number of packages

Customs
and/or Police
escorts for Actual Loading
special goods date
are payable
by the
consignee

“Full container
load”: a single
exporter for a
single consignee

Number of Originals Place where the freight costs are

bill of lading paid.(departure or destination)

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6.4 The manifest
The manifest is a summary established at the port of shipment of all bills of
lading. It is therefore an inventory of the goods transported from one port to
another, signed by the captain.

On arrival in the port of destination, it may be that the batch of goods declared
on the B/L has to be split, in order to be delivered to several parties. The
documents, upon sight of which the captain is permitted to deliver part of the
goods included on the bill of lading, are called delivery orders (D/O). The D/O
is given by the holder of the original B/L with reference to the documents. The
delivery orders should also therefore be regarded as negotiable instruments.

6.5 The CMR

With regard to road transport, we speak of the C.M.R. - waybill. In fact, the
abbreviation C.M.R. means "Convention relative au contrat de transport
international de merchandises par route".

C.M.R. Regulations apply only when one of the two countries concerned with
international transport is bound by this Convention. The C.M.R. fixes the duties
and obligations of the parties bound by the contract of carriage. It also
determines the distribution of responsibility between the moment of taking in
charge and the moment when the goods are delivered. The information in the
waybill is useful as evidence of the state of the goods at departure. In the event
of dispute, a carefully-completed document is of crucial importance. The
C.M.R. is drawn up in three copies. The first for the shipper, the second
accompanies the goods and the third remains at the carrier's disposal.

6.6. The international consignment note (C.I.M)

International transport by rail is regulated by the C.IM. (Convention
Internationale sur le transport des marchandises par chemin de fer). The
international consignment note (C.IM.) serves as a contract of carriage, as
transport document and as a customs document.

For transport by large container, the "TR transfer note" is used.

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Section VII

Participants

Maritime transport is effected by maritime transport companies. A difference is

made between sea transport companies and coastal navigation companies.
Unlike maritime shipowners, coastal navigation shipowners use small boats,
which generally travel along the coast or go up the major navigable internal
waterways. According to the form of use, a further distinction is made between
the regular lines and tramp lines, it being understood that liners connect at
regular intervals ports that they themselves have determined.

Lining up the wide range of trades and functions that have a role to play, the
first to appear are the shipping agents or consignors. They look after the
interests of the shipowners. They intervene to reserve the necessary pilots, tugs,
where necessary, a mooring, to provide for fuel and catering supplies. They pay
the harbour dues, draw up manifests and bills of lading, box freight, etc. One
important activity of the shipping agent is of course seeking a cargo for the
ship's next outward journey.

After the shipping agent comes the ship-broker and the operators. The broker
acts as an intermediary for the loading of the ship and as consignee (receiver) of
a multitude of tramps (bulk carriers or ore carriers not working regular lines)
which enter the ports.

The forwarding agent intervenes in the loading of the ship by providing goods
either as an intermediary or as a freight consolidator. The forwarding agent is
the interface between the buyer, the seller, the carrier and the authorities in
relation to the goods. He takes delivery of the goods which are entrusted to him,
supervises their handling and storage and guarantees their reforwarding.

Goods handling companies are responsible for loading and unloading the
aforementioned goods on or off the ships according to a stowing plan. They are
called dockers, stevedores and on the Mediterranean, acconier. This is expert
work because the loading of a ship requires considerable experience. The
stability of the ship must be guaranteed at all times. The capacity of the ship has
to be used to the maximum, taking account of the weight and dimensions of the
cargo. This has to be loaded so that it can be unloaded, without displacement, in
the ports of destination. In harbour territory, the aforementioned companies also
weigh goods, take measurements, check quality, provide with new identification
marks or store them in the warehouses.
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Certain typical categories of trades are found here: the dockers for all kinds of
work, bridge workers, crane drivers or gantrymen, warehousemen, harbour
vehicle drivers (straddle and front fork trucks), the principal operator (person
responsible for the loading), foremen, timekeepers, skilled captains and
insurance experts and other specialists such as mechanics and electricians.

With regard to the contracts of carriage, intermediaries are often also involved.
The freight forwarder contracts in his own name engagements for the carriage
of goods. He replaces the shipper. Thanks to his specific knowledge of the
various transport possibilities, applicable tariffs and customs regulations, he
represents an important link in the transport of goods relationship. By putting
together a number of transport orders, he is often able to obtain major price
reductions on the part of the carrier. He should not be confused with the
forwarding agent who merely carries out his customer's instructions as agent
and accounts to him for them.

These names may differ according to the port.

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Section VIII

Liaison with other authorities

The work of the Customs Officer takes place within certain legal or procedural
limits, which vary from country to country. E.g. Health, immigration, security
etc.

In their daily work, Customs officers should be aware that they could come
across certain situations for which they are not responsible but may need to act.

In these situations high level agreements often exist between the various
authorities involved. These will cover permitted actions and co-operation.

These liaisons/agreements with other authorities, like Port authorities, are

different per country and sometimes even different per port area. It is important
customs officials understand their responsibilities in these areas.

It is also useful to establish an effective liaison with these other authorities at a

local level.

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Section IX

Storage at the port

and stuffing
9.1 Container freight station (CFS)
Originally, the CFS were depots, where small consignments were gathered with
a view to their packaging, unloading or delivery. Given the breadth of container
transport, a wide range of essential services is currently found there:
- storage of a limited number of empty containers and frames
- cleaning, repair and fumigation of containers
- storage of damaged goods
- temporary storage of goods (which have not been claimed immediately by
the consignee)

9.2 Stuffing the container

Stowing the container on board is the responsibility of the captain. But he cannot
monitor stowing inside the container and is not therefore responsible for that.
- Any shifting inside the container can cause damages to goods
- Poor distribution of goods in the container will, moreover, cause an imbalance
that will make stowing on board difficult.
- By inertia, a badly stuffed container on deck can give rise to shifting, or even
the loss overboard of one or more containers.

Professional stuffing of a container is therefore carried out according to precise

techniques. Each container containing dangerous substances must, moreover, be
accompanied by a stuffing certificate.

Any non-professional stuffing has to come to the attention of the supervisory

authorities and is often grounds for detailed control.

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Section X

Costs
10. 1 The passage of a container through a port

The decision whether to control a container is not devoid of economic

consequences and involves in the majority of cases additional costs at the time
of handling. The service needs to be aware of this dimension and take account
of it in order to adjust its controls according to the desired objective.
The different elements making up the cost of containers passing through a port
upon importation are made up as follows:

- the THC (Terminal Handling charges), called sometimes CSC Container

Service Charge: they correspond to the share that goods pay for handling.
Each container pays, regardless of its size. The tariff is imposed by the
shipping company.

- Bill of lading expenses. A BL can cover several containers but invoicing

relates to the BL rather than the loading unit.

- Harbour data processing or TPI: this service may or may not be invoiced for
depending on the port and corresponds to the computer services provided to
all the harbour operators

- Any harbour dues on goods charged according to the port

- Transit payment: this represents the forwarding agent's service for transit or
complete customs clearance

- Port cartage which corresponds to transport services from the terminal to the
warehouse or from terminal to terminal

- Land transport invoiced as Return, ie departure of container full from the port
and return empty to port or invoiced "one way" inland transport: full
container from the port, and return empty at destination. The latter solution
being more economic.

- Transfer expenses: these represent the expenses associated with

intermediaries acting within the framework of grouping. For example: a
forwarding agent buys or rents an empty container. He stuffs it with a
number of small groupings. These small forwarding agents have as many
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 different agents in the port of arrival. To recover the original BL, all
claimants will have to be contacted.

- Some services associated with the nature of goods involve additional costs,
for example: fumigation against insects

- Demurrage: shipping companies grant an exemption period (for example 4

days) in the hire of the container. After this period has expired, hire is
invoiced by the day. This invoicing varies according to the position of the
customer.

- Parking charges: warehousemen invoice claimants of goods for expenses

associated with storage of the container at the terminal. An exemption period
is also applied before the application of a daily tariff, which also varies
according to the customer.

- Customs and fiscal duties and levies.

These charges, very variable according to the port, are charged by harbour
operators as a factor in the competitiveness of ports.

10.2 The customs control decision

In the majority of ports, a customs search at the terminal in a secure place will
be the subject of an invoice to the customer for handling (cost of transporting the
container from its site at the terminal to the search area)

A decision to weigh can also be added to this cost if the public scales need to be
transported especially.

Full container stripping when it is not carried out by the customs services also
has a high cost.

Use of scanning in certain ports is the subject of so-called "multi-stop" invoicing

justified by the road transport operators by an additional stop at the exit of the
port.

Hiring the chassis: when the container is the subject of a detailed search and is
on a harbour chassis, the chassis can be invoiced for under hiring. It also has the
disadvantage of being immobilised during the time of control, which can
obstruct planned transport operations. This can be inconvenient when it involves
an independent carrier who owns only one tractor and one or only a few trailers,
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the container is seized and there is no question of liability on the part of the
carrier. Keeping the container on this chassis amounts to depriving an innocent
carrier of his working tool. When his liability is not in question, it is advisable to
find alternative solutions quickly. Good relations with the various port operators
- warehousemen, storage and hauliers – make it possible to deal with such cases
quickly and effectively.

The customs services have to be aware of these financial constraints in order to

carry out their control in a rational manner.

The customs services are recommended to approach the harbour authorities to

ascertain the tariffs applicable in the port of which they have charge in order to
assess the cost of subjecting a container to control.

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 Part two

THE SELECTION OF CONTAINERS

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Section I
The reasons for control
Customs fraud is motivated by factors associated to a large extent with
economic policy and the structures specific to each country. Consequently, the
relative scale of different kinds of fraud varies from one country to another
accordingly. The topicality of cigarette smuggling shows the importance of
taxation for each country associated with this smuggling as well as the influence
of legal distribution networks.

The detectable types of fraud by container are well known to the customs:

1.1 Smuggling
The smugglers aim is to completely escape Customs control on goods liable to
high rates of duty or to anti-dumping duties, to bring in prohibited or restricted
goods, to avoid measures designed to protect endangered species, to by-pass
reproduction rights etc. To that end, smuggling uses the following different
methods:

- Goods are concealed among regularly-declared goods or are concealed in

packaging
Advantages:

transport safety: fraudulent goods travel under the same conditions as
ordinary goods

the consignment is sent with other consignments: the smuggled goods
are "drowned" in the lawful trade flow and therefore more difficult to
locate

the limitation of complicity: most participants are unaware of the
genuine contents of the consignment

commercial secrecy: under the same conditions as lawful goods, the
consignment is protected both with respect to the authorities and from
competitors

anonymity: in the event of a problem with customs, it is enough
simply not to take delivery

- goods are concealed in the fabric of the container, namely the doors, floor,
walls, passages provided for handling the containers, the roof or in natural
hiding places associated with the structure of the container (refrigerated
container), or concealed behind false partitions

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- the use of a container intended for an importer who is completely unaware of
the fraud (rip-off)

This involves a 100% legal load: a legal shipper, a legal forwarder, a legal
consignee, a legal notify party, a legal route, etc. This type of smuggling is
used for drugs trafficking (of Colombian cocaine). Smuggled goods are
placed in a container chosen by required destination and recovered on arrival
by an accomplice before the delivery of normal freight to the consignee.
The advantages for the defrauder are numerous:

random character of the vector

unforeseeable character

total anonymity

well-placed complicity (forwarding agents, handling staff)

difficulty for the customs of detecting consignments phased in a
variable manner on economically justified direct flows

no special maintenance

How to detect a "rip off"?

- the use of this means of smuggling is intended to by-pass the risk analysis
- common criteria emerge however as a result of seizures:

Examples from the port of Antwerp:

1) coffee
- - if the coffee is in bags, the majority of the seizures have been loaded at
Buenaventura.
- if it is instant coffee, the loading port is Cartagena
- containers are LCL/FCL, the containers being loaded at the port
The first detected seizures of drugs were made from on top of the coffee bags,
just behind the doors. Current seizures show that drugs are now hidden in the
second row underneath the bags of coffee. Seals. Sports bags containing drugs
often have attached seals numbered identically to the seal numbers on the Bill of
Lading, to be placed on the door after the rip-off has been carried out. This
avoids any later suspicion, allowing the same method to be used for several
consecutive consignments.

2) bananas
Most of the bananas loaded at the port of Santa Marta are transported in
Chiquita ships and Chiquita containers.
Seizures made by the port of Antwerp show a trend in hiding-place techniques
used to conceal the drugs: in the structure of the container, in cardboard boxes
and even in the bananas.

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3) palm oil
Transported in tanker containers, two seizures were made where the insulation
was replaced by cocaine. The tankers were loaded at Santa Marta on banana
boats. It appears that this modus operandi has been used several times.

4) empty containers
An analysis of the seizures made in Antwerp show that they are loaded in
Cartagena.

How are rip offs recovered ?

- at the terminal (where security is lowest)

- during transport between the terminal and the consignee
- on the ship if the container is accessible: in this case, the delivery port is not
necessarily the unloading port which shows that there is complicity on the
part of crew members

Experience shows that this means is used regularly and when it exists, the same
concealment is repeatedly used. It requires a workshop for
disassembly/reassembly of the hiding place, temporary removal of the container,
hatches and truncated means of sealing, and complicity. But supplies of
smuggled goods can be regular, making it possible to foster the loyalty of
accomplices. Only careful examination of the structure, or scanning the
container, can make detection of this fraud possible.

The empty containers, when fitted up, appear to be used several times.

1.2 Container theft or theft from containers before or during authorised

unloading during transport
The container can be opened by the defrauders who remove from it smuggled
goods before it is presented to the Customs. The container can also be spirited
away to be taken to a safe and distant place in order to be opened then
abandoned.

Some containers have no covering of both doors, sealing being assured at the
point where both doors meet by a flexible synthetic rubber joint system. At most
there will be a plate for a stop on the right-hand door. With a simple lever, this
plate can be bent to release the left-hand door. In practice, the right-hand door is
sealed, on the basis that without opening this door, it is not possible to open the
other one. Using a simple crowbar or by pulling with a car trailer cable, the left-
hand door of this type of container can be opened, leaving the seals intact and in
place on the right-hand door. It is closed by exerting high pressure on the left-

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hand door, possibly one or two taps with a hammer on the plate, all of which
will go unnoticed in the majority of the cases.

1.3 Manipulation of seals and/or locking mechanisms

To place or recover the smuggled package, it is possible to have access to the
container without altering the seal. This is possible in particular for refrigerated
containers (dismantling the power unit) and tampering with the doors of the
container, or after falsification of the seals.

Alterations associated with locking mechanisms

- the hinges and bolts which form part of these are not applied in the
prescribed manner, in order to have access to the inside of the container, even
when sealed
- the external and internal locking system does not meet the requirements.
These locks sometimes show narrow slits which make it possible to remove
the sealing wire without breaking it
- the pivoting valve of the locking system is attached by a single bolt; once
loosened the container opens easily

alterations associated with the sealing device

- with regard to covered containers, it is possible to split the sealing cable in a
place which is invisible from outside. This will not be noticed during a
superficial control
- sometimes the sealing rope is folded in loops through several eyelets. The
slackened sealing rope will give sufficient space to remove or add some
goods
- the cover can also be cut out, then restuck with adhesive tape of the same
colour
- diversion of the container from the legal route: fraud in transit

In a number of ports, searches for smuggled goods are even carried out before
customs clearance by examining the manifests in specialist targeting cells.
the falsification of seals :

plastic so-called indicative seals: the method is simple: it is sufficient to
heat these gradually with a lighter, taking care not to burn or melt them. At a
certain temperature, the plastic becomes more flexible and one opens the seal
by simple traction. As no part of the seal has been damaged, the seal, once
cooled, is in its original state. This method is almost undetectable.

Seals of the "strip seal" type. Falsification is even easier as the sealing
procedures are not always sufficiently rigorous. Indeed in a large number of
cases, it is the truck driver who places the seal, not the shipper. This involves
folding over the end of the seal and sliding it in the ad hoc slit. Afterwards it
is easy to withdraw the seal and open the container. Another method involves
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 cutting the metal strip, then resticking it with the adhesive "lock tight" for
metals.

"standard bolt" seals. It is sufficient to introduce a papier-mâché pellet
into the bottom of the nut which prevents the bolt from going fully home,
that is to say the rings of the nut do not engage with the grooves of the bolt.
Thereafter simple traction of barely 1kg, makes it possible to loosen the bolt
which will be replaced by removing the paper pellet and closing the seal
correctly again.

A simple method consists of recovering old seals, tampering with them to
recover the nuts, erasing the old numbers cleanly and copying onto this
"blank" nut the number of the fractured nut.

Traces of tampering:
Nuts are normally round,
after tempering the side
where the number is
mentioned become flat.

Tampering with old seals:

Erasing the old numbers cleanly and copying the
number of the fractured nut.

Seals of the "cable lock" type: when the seal is put in place, the cable is
not fully tightened, and a broad loop is left. A piece of adhesive is then
placed on the cable before cutting it. The engaged part of the cable is
released and the seal is then put back. A second method involves twisting the
cable in order to reduce its section so that there is a means of releasing it.
Falsification is detectable because the seal remains twisted, but one must be
able to interpret the symptom.

1.4 Commercial Fraud

1.4.1 Undervaluation
The defrauders' aim is to avoid import duties, or to carry the volume of imports
beyond the ceiling permitted under the ad valorem quotas, or to escape controls
in force in the country of export (exchange control in certain emerging
countries). There are many methods: double invoicing, part payment in cash not

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mentioned on the invoice, omission of certain expenses that have to be
incorporated into the value for customs purposes, such as fees, but also
undervaluation in order to escape controls, in particular as regards works of art
and objects of antiquity.
1.4.2 Overvaluation
This practice makes it possible in particular to escape anti-dumping duties for
goods with a value below certain threshold. The method often used is to over-
estimate the values given on the invoice

1.4.3 Declared quantity lower than reality

The aim is to escape import duties or levies for a part of the consignment, and to
escape quantitative restrictions on quota goods. Moreover on imports; these
undeclared imports are sources of undeclared tax revenue and allow the
emergence of a "grey" market not subjected to the taxes in force in the country
of consumption. These frauds are often associated with illegal work.

1.4.4 Quantity higher than reality

This practice makes it possible to benefit unduly from export refunds or to
benefit from a VAT rebate on exports. It seems to be currently applied for false
export statements to the African continent.

1.4.5 The false declaration of type

This makes it possible to avoid all or part of the import duty, to escape the
import levies, prohibitions, and finally restrictions on quota or origin. The most
obvious method involves giving goods a more favourable designation which is
subject to less control. The tariff slippage can be more or less easily detectable
according to the presentation of the goods (presentation in separate parts).

1.4.6 The false statement of origin

Defrauders try to benefit unduly from preferential duty rates applicable to
products originating in certain countries and/or to escape quotas or anti-dumping
duties applied to products originating in certain countries. The origin indicated
on the documents attached to the customs declaration is inaccurate, and all the
origin stamps on the goods themselves have been erased before shipment, so
goods can be given a new label indicating a false origin. Containers can use
indirect routes to lose the trace of the real origin. Knowledge of the packaging
usually used in a country can be a means of recognition for the customs.

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 1.4.7 False licences, permits and health certificates
The aim is to escape quotas, restrictions or the application of health regulations.
Unauthorised authentic blank certificate forms are completed, certificates are
counterfeited, information on the authentic certificates is falsified (increased
quantities, for example). Post-clearance verification procedures for this type of
document are a means of fighting this type of fraud.

1.4.8 False declaration of destination or consignee

This makes it possible to escape export restrictions (by-passing an embargo for
example), to validate refunds which can be differentiated depending on the
destination, or to mask an organised smuggling undertaking.

1.5 Random selection

Selection systems, whether computerised or not, often comprise a random
element in order to scan all goods which would otherwise be excluded from
controls in view of their low risk factor. But these tariff headings or countries of
origin can be used as refuge positions to mask smuggled goods. It is therefore
necessary to check them on a regular basis. The selection criteria are often
known by regular declarants, so the random factor is therefore a means of
carrying out physical checks on goods excluded from risk analyses.
To be effective, random selection must not be a subjective choice by the official
but the genuine result of mathematical chance.

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Section II

The selection criteria

The customs clearance of goods is subject to national and local selection criteria
making it possible to choose the flow, the goods involved in a physical control,
a documentary control or an immediate order to remove. To detect fraud, the
customs can use risk analysis techniques (CAP and anti-dumping duties cases in
particular)

The risk criteria and indicators and the analysis methods are given in the "Guide
to risk analysis in customs controls" published by the Commission, to which it is
advisable to refer.

2.1 Fraud indicators

Certain indicators are common to all areas. Primarily, they are as follows:
- the fact that the economic operator and/or the forwarding agent concerned
have previously committed an irregularity or offence of a customs and/or
fiscal nature
- the lack or absence of co-operation on the part of the economic operator
concerned
- use of a carrier or a forwarding agent of dubious reliability
- the existence of preliminary specific information with regard to a particular
product in specific circumstances (communication of Mutual Assistance
cases for example)

2.2 Risk indicators associated with the goods

One can quote the following elements:
- use of tariff code information that is not easily identifiable without recourse
to the laboratory services
- products systematically included under the heading "others"
- inadequate packaging for the type of goods
- dubious labelling (smudged, distorted, mis-spelt or faint printing)
- absence of labelling
- discordance between the weight and the number of packages or between the
number of packages and the number of items
- unjustified route: long distance covered with possible transshipment
- choice of uneconomic route
- succession of bulk breaking, additional cost factors

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2.3 Risk indicators associated with the operators
Among these elements, one can quote:
- the existence of legal links between the importing company and the supplier
- newly-formed companies
- companies with a weak financial structure and/or heavy indebtedness
- sudden change of the introduction office
- etc

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Section III

Information Sources
The effectiveness of selection depends, above all, on the quantity and quality of
information available to customs. This is why it is essential, on the one hand, to
have reliable, complete and up-to-date sources of information and, on the other
hand, to be able to make use of such information.

Information has to be readily available for all customs offices even though it
may be specially processed by a central department specialising in information.

The information sources are located:

- within the local customs office
- at regional customs headquarters
- at central customs headquarters
- in the services that specialise in customs information
- in other government and public departments (ministries of agriculture, trade,
transport, police services, etc)
- in tax controls
- among the operators (shipping lines, customs agents, harbour/airport
operators, competitors). It is important to enter into an agreement with
operators to provide alerts in relation to abnormal behaviour
- in other Member States and within international organisations
- in the newspapers and specialist or general-interest magazines
- within commercial or professional organisations
- by having access to the INTERNET.

Among information sources, a special place can be granted to databases and to

communication networks computerised at international level and in particular by
the European Commission. Some of these sources are not accessible directly by
customs offices, but require to pass through authorised servers. These are:
- the CIS (customs information system). It includes a database containing
messages transmitted on suspected or established irregularities that the
member State decides to transmit according to the applicable regulations.
- Computerised communication networks of mutual assistance
(CIS/SCENT/tax SCENT), which allow access to the following bases:
- The COMEXT database, which gives the Community's foreign trade
statistics
- The CELEX database which contains the entire body of Community
legislation (treaties, secondary legislation, case law of the European Court
of Justice)
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 - The IRENE database relating to irregularities and recoveries notified to
the Commission concerning various fields (EAGGF, traditional own
resources, EURATOM regulation)
- The Taric (Community integrated tariff) database relating to the customs
treatment of imported and exported goods. A number of risk indicators are
incorporated regarding restriction and embargo measures
- The BTI and BOI databases (binding tariff information and binding origin
information)
- Etc.

With regard to other sources, it is possible to consult

- Dun&Bradstreet, with regard to information on commercial companies
- Lloyds seadata, for data concerning ship owners and movements of vessels
- Contraffic, programme for tracking containers.
- Tradebytes, for manifests from sensitive areas.
- Marinfo for exchanges of information relating to containers associated with
drugs, alcohol and cigarette trafficking,
- Yachtinfo, for information on the movements of yachts, tugs, fishing vessels.
- Local port servers which make it possible to find out about ship stopovers
- Local sites relating to maritime shipping.

The service must be able to access this operational data. But it also has to have
strategic information that shows trends in fraud and the development thereof.

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 Part 3

CONTROL

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Section I

Choice of location for carrying out controls

The physical examination of the goods inside a container poses specific
problems for the supervisory authorities.

The most common method of control involves the partial unloading of the
selected goods and checking them in the presence of the owner or his
representative in a secure search area. According to the type of goods (fragile
goods for example) and degree of risk, it may be more judicious to carry out
control at the destination and to be present at complete unloading by the
destination office rather than making a partial search at the terminal.

Certain packages are not easily accessible, or initial controls give cause to
suspect an anomaly, and the control decision can be directed towards unloading
the full load. In the case of a classic commercial check, unloading can be carried
out in a private warehouse under the surveillance of the service. The advantage
of using this type of location is that the service has the means of handling which
are not available in all customs offices. Weighing equipment also is often
available in these warehouses when it is necessary to weigh a number of
packages and note the total net weight. This practice is often used for
consolidation or break-bulk of the container, with the service witnessing the
loading or unloading operations. In all cases of loading it is advisable, once the
search has been carried out, to ensure that the container cannot be reopened
outside the presence of the service.

Refrigerated containers carrying perishable goods have to be taken to a suitable

place for checking where the inspector has at his disposal for the control of
goods, scales, handling mechanisms, and if frozen foods are involved, a
defrosting as well as a freezer cell. Equipment for cutting up goods may be
necessary in order to carry out a control. (Beware also of Veterinary restrictions
on the opening of containers which contain foodstuffs)

Other circumstances justify verification in a secure location : this is the case

with chemicals, flammable or dangerous goods, and explosives. In all cases, an
expert or laboratory will have to be contacted in order to make sure that a
control can be carried out safely, to know which precautions to take and which
rules to follow in particular for taking any samples.

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Certain circumstances require that the control of the container be carried out on
the wharf before customs clearance and in all confidentiality. Indeed it is
advisable, where there is suspicion of organised fraud, to prevent internal
complicity among the various operators of the logistical chain.

In the event of suspected smuggling, precautions with regard to confidentiality

have to be taken in cooperation with the warehousemen and shipping agents. It
is important to know that when the forwarding agent is a simple agent who
carries out his customers' orders, he informs his customer almost systematically
of all operations which can generate additional costs. Thus the consignee will be
warned of a customs search on financial grounds while you, at the same time,
wish to keep the control confidential. This situation can vary according to the
port but is bound to increase in the future with the pre-customs clearance
procedures.
Certain targeting teams at ports have their own covert search facility with the
necessary equipment to check the container and goods in complete safety. This
type of location allows control in all confidentiality when there is suspicion of
smuggling.

For the detection of certain types of fraud (rip off), it can be judicious to choose
to check containers as they are unloaded from the ship. In this case, the
conditions of control have to be carried out with the maximum safety in view of
the movements of trucks and handling gear around the loading and unloading of
ships.

The last possibility is the case of supervised delivery to the destination with the
agreement of the various authorities concerned. This is the case when a
container has been pointed out as being suspect, or when control has permitted
the identification of smuggled goods and, confidentiality having been
maintained, either a monitoring system of reception by the consignee, or a
system of monitoring the delivery is set up.

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Section II

Examination of the container

(FOR THE DETAILED SYSTEMATIC APPROACH SEE CHAPTER 5)

The check starts with an examination of the state of the seals, even where these
are commercial seals.

Depending on the circumstances, two verification techniques are possible:

- Total unloading of the container
This is carried out under the continuous surveillance of the customs.
Depending on the circumstances and the practices of each port, it may be
carried out by customs officers.

- Partial unloading
this technique makes it possible to view the corners and the walls, i.e. any
place likely to constitute a deliberately-created hiding-place and that makes it
possible to take internal measurements if necessary. Different techniques can
be applied: to create a parting between the goods, to have a wall dismantled,
to have a passage right down to the very bottom if necessary, or use more
sophisticated means such as endoscopes, etc.

to discover:
- goods without real commercial value on the internal market masking other
fraudulent packages
- goods packaged in an unusual way
- to be aware of odours in the container or odours camouflaging those of
certain drugs

The choice of search and depth of search will obviously depend on the time and
resources available.

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Section III

Control Methods
To be carried out effectively, a search of a container and its load has to be
carried out by a team.

The search must be systematic and rigorous of both the exterior and the
interior and the following examinations carried out:
- olfactory
- visual
- auditory
- tactile

Methods:
Officers may use the following techniques:
- visual inspection of the walls, natural hiding-places and doors
- listening for dull sounds when the walls are tapped for example
- the scraping of fresh paint
- analysis of the measurements
- a survey of natural hiding-places (air vents, cavities created by an internal
partitioning etc)
- checking for the possible existence of special hiding-places resulting from
the existence of false walls with unusual contours
- weighing if possible
- the removal of removable panels
- possible drilling. Any use of this technique should be carried out if possible
from the interior in order not to damage the structure of the container itself.

All techniques have to be used advisedly with a view to preserving lawful

goods.

Beware of damage. (Normal physical check)

In line with national legislation the client (importer, etc) may be present when
the container is physically checked. It is also possible that his/her representative
could attend. In the case of damage, caused during transport or while
unloading/reloading by the stripping crew, the client, or his representative will
take action. It is advised that the custom officer makes notes of the damage on
his physical check form. A copy of a damage report should be added to the
customs file.

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In the circumstances where the custom officers are unloading/reloading the
container themselves they should be aware that they are dealing with goods that
do not belong to the customs. If there is any damage, either caused be customs
or noticed when the container was opened, the client (importer etc.) should be
notified. This is necessary to prevent claims. Photos should be taken and a
damage report should be filled in. (the procedure varies per country)

In case of a legal investigation, there are other rules involved. These vary per
country. For instance if you should find cigarettes hidden in a concealment in a
container, damage to the container or the goods is less important.

The necessary equipment:

- the following portable equipment is useful in the search for fraud: flashlight
(or head light), screwdriver, mirror of the garage type, manual screwdriver,
drill, deer foot, hammer, decametre or rangefinder, cutter, ladder, portable
lamp making it possible to illuminate the interior of the container, or a torch,
bolt-cutter.

- The use of an endoscope may prove useful as well as the use of X-ray
equipment which makes it possible to X-ray a large number of low volume
goods very quickly

- The use of a fixed or mobile scan in some ports makes it possible to view the
structure of the container and detect large fraud flows quickly in particular
when goods have been declared uniform.

- For ports equipped with a customs search hangar, it is necessary in addition

to have fork lift trucks for handling, pallets for storing discharged goods, an
approach ramp or wharf ramp at a level where the goods can be checked, as
well as lifting and weighing gear.

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- For the officers' personal equipment, a safety helmet and protection for the
eyes and face are recommended, safety footwear, respiratory protective
devices, gloves and possibly a safety vest (traffic).

- Use of sniffer dogs: when a customs officer suspects a cargo of contraband, it

may be useful to call for a dog team to look for it. In this case, it is advisable
not to open the container until the dog arrives. The air leaving the container
will be saturated with all the odours inside, and if drugs are inside, the dog
will be able smell these concentrated odours. As far as possible, one must
endeavour to allow the dog to have access to all of the container. In some
cases, the dog will be able to work only when unloading is complete. It is
advisable to leave sufficient space around the goods to allow the dog to work.

- Finally, one must not hesitate to take samples and carry out analyses in the
laboratory if in doubt.

Like any other means of transport, the container lends itself to many different
kinds of fraud. In the majority of cases, with the exception of rip-offs and
unauthorised use of a company name, the importer is an accessory to fraud. For
the sake of effectiveness, therefore, it is advisable for the anti-fraud services to
question the importer without delay, and if possible before he knows any fraud
has been detected.

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