This commitment the carriers made, comprised a raft of promises that in effect said the signatories were good operators, doing a good job, to a good standard and would not accept cargo that was not safe or secure, nor would they accept cargo of which they were not aware of what it was, where it originated and how it was treated from a security perspective.
But far more than simple a ‘gentleman’s agreement’ the carriers agreed to a timeline specifying that by 1 July 2014 they would independently validate their facilities, processes and partners at their last points of departure into Europe. “In addition to promising that your security processes and documented procedures are true, accurate, complete and up-todate, you have to actually prove they are operationally implemented,” said Mike Woodall, head of independent validation and regulatory engagement at the International Air Transport Association (IATA) said. Failing to comply with these requirements by the given date potentially means being denied the ability to bring cargo into Europe.
The ACC3, more formally known in unwieldy regulatory parlance as the ‘Air Cargo or Mail Carrier operating into the Union from a Third Country Airport regulation, is one of the most important pieces of new air cargo security legislation to have emerged in recent times. The ACC3 is a direct result of the Yemen cargo bomb plot in October 2010 in which printer cartridge bombs were successfully loaded onto two aircraft and flown into multiple countries, but both detected before they were detonated.
Many within the industry have been critical of the move seeing it not only as another example of a regionally applied solution, but one that is in fact extra-territorial, reaching into countries far beyond the EU and also potentially impacting thousands of stations and facilities around the world. “The ACC3 doesn’t just effect the carriers, it effects the entire secure supply chain,” highlights Woodall.
“If you ship or fly cargo into Europe and if you’re part of that cargo supply chain, if you’re the people that ship the cargo, screen the cargo, consolidate the cargo and handle it and eventually present it as safe and secure cargo on the aircraft into Europe, as well as through Europe as transit cargo, then you are affected by these rules and regulations,” he highlighted.
Noting that the declaration is “not just words on a piece of paper tucked away in someone’s drawer or the security manager’s office” Woodall highlights that safe and secure processes have to be shown to be operationally implemented, “not just at the nice shiny stations and the big hubs, but at every single last point of departure into every single operation that they maintain.”
A divided world
Making the issue more complicated, EU regulators divided the world up into three categories following a global risk assessment. Some parts of the world need additional security measures and are classified ‘red’ countries while others do not and are considered ‘white’ countries, while for still others there is no ACC3 requirement and are classified as ‘green’ countries. As to which country falls into which category, this list is confidential, but is known to all the carriers.
For the former CEO of Lufthansa Cargo, Karl Garndt (who recently moved from the cargo division to become the new head of its passenger business) when asked in December 2013 if the process was causing a headache for the carrier, he replied: “We would have more headaches if we didn’t have these processes in place. For us air cargo security is ab solutely top priority. As an industry, it’s and issue we have to deal with and we want to deal with and I’m confident as an industry we will be able to meet the deadline.”
He went on to say that from Lufthansa’s perspective there are countries on the ‘green’ list that are theoretically safe, but actually require additional measures.
“But I think we have a good plan, a good programme, we have started it and are making good progress. There will be issues here and there that we will have to continue to work on as an industry,” he said, acknowledging the issue of some countries that are unwilling to agree to the auditing process.
Woodall notes the EU regulators were “clever” because the regulations are focused on the carriers coming into Europe, not individual states, which means the regulations do not meet the ICAO definition of extra-territorial. This however has not pacified a number of countries who are unhappy with what they see as regulations being imposed on them and their flag carrier by the EU. In some cases this has resulted in the inability of carriers to undertake the necessary independent audits. Speaking at the recent IATA World Makhetha, GM South African Airways Cargo underscored this point with the example of South African regulators who have “differences of opinion” with the EU over the ACC3 audits. “So we are squeezed for time. From our side we are ready and are appealing to the regulators to come to some agreement as to how they are going to work with each other,” he said. “I think we have demonstrated to regulators that we as the industry are very much approaching this on a responsible basis and we are going to do as much as we can to make sure that nothing slips through. Having said that, we live in a political reality where some of the countries including my own have political issues that the airline cannot deal with when it comes to consultation and security and this puts some of the airlines in a difficult position,” Makhetha said.
So how does it work?
The audit can only be undertaken by an independent validator, someone who has no previous consultancy, or form of engagement with the entity being validated in the previous 12 months and have not been employed by the entity being validated in the previous 24 months.
The candidates for this role must be formally supported by a European state and they must prove they have the technical and operational knowledge and experience to perform these tasks. They are also subject to a background checks.
The biggest problem as Woodall points out is that at the time the agreement was signed in 2012 (and even up to early 2013), not one single validator existed anywhere in the world that was trained, approved and EU accredited to do this function.
It was this very situation that prompted IATA to take action and establish the Centre of Excellence for Independent Validation in order to provide quality training, examination and try to create an industry standard. Once approved and accredited by the EU regulators, IATA began, with three approved trainers, the training process with the first batch of candidates put forth by the various European countries. In all there are roughly 80 EU approved and certified independent validators available currently.
Part of the validation of the carrier’s security processes includes any entity captured in the carrier’s secure supply chain which means they also have to be independently audited and validated by the carrier’s validator. The alternative, according to Woodall, is for their ground handler, their screening entity, or their regulated agent for example, who may handle 10,15 or even 30 carriers, to voluntarily be validated in their own right as Regulated Agent Three or RA3 status instead of being independently validated by each and every carrier they handle.
Once they have their own validation they are able to share that status with all the carriers they handle. This helps to reduce the required number of validations from thousands, he notes.
Giving his perspective as a ground handler, David Ambridge, GM cargo at Bangkok Flight Services said the decision was made to undergo RA3 validation “because we had 21 carriers flying into the EU from Thailand and rather than getting 21 separate audits on 21 different occasions from 21 different independent validators and airlines paying 21 times, we decided we would do the hard work. We also looked at it from the point of view that it might give us an advantage over our competitors and we think it was the right thing to do.”
He added that in his view there should have been “little bit more engagement, a little bit more dialogue with the whole air cargo community,” by the EU.
Also built into the regulations, parties who are co-located or co-effected in any given location – carriers, ground handlers, regulated agents, freight forwarders – can share the services of a single validator. Each gets its own report which may go to different European states, but in this way the limited pool of validators is maximised and cost and business disruption is dramatically reduced.
To some extent the regulations bear more heavily on European carriers because of the fact that while their main hubs are located within Europe, their spokes are elsewhere in the world. “European carriers with multiple non- European spokes need more independent validations than non-European carriers,” Woodall notes.
Status update
If the recent poll of the WCS audience in Los Angeles is any indication, the industry is largely on top of the issue with only 19 per cent of those affected by ACC3 saying they will not be ready by the 1 July deadline. A number of carriers Payload Asia spoke to said their audits were in various stages of completion, with some having completed the process, with certification in hand.
THAI Cargo for instance said it is now compliant and prepared for the 1 July deadline. “THAI Cargo is pleased to guarantee an entirely secured process through our service as an air carrier and warehouse operator for all shipments to EU states and on all flights across the THAI network.”
THAI first obtained ACC3 for its Bangkok hub and then subsequently for two additional stations – New Delhi and Madras – “in order to increase our capability to meet increasing demand for shipments to countries in the European Union in the aircraft belly and on freighter flights,” it said. A THAI spokesperson also told Payload Asia that as a Warehouse Operator, THAI Cargo was appointed as a regulated agent (RA) on worldwide security by the ICAO and renewed its license in 2013, with a certification validity of five years.
For Cathay Pacific Cargo, it’s main hub in Hong Kong does not need to undergo an audit to give it RA3 status because the territory is understood to fall under the ‘green’ category. Speaking to Payload Asia, James Woodrow, director cargo for Cathay said the carrier is well prepared and making good progress on audits at its two Dubai stations (DWC and DXB) along with three Indian stations – Chennai, Mumbai and Delhi.
“We’re feeling pretty well prepared and we’ve worked pretty closely with the TSA on the US side so we’ve got quite a few ports that are approved for upstream screening which means we can screen the cargo in the ports and move it to Hong Kong and then it doesn’t need to be rescreened. We’ve got some 20 ports that have gone through that TSA audit process so we know what needs to be done. For Cathay we just cannot afford to have our service interrupted, it’s absolutely critical for us that we get it right,” Woodrow added.
Non-compliance
A key question that remains unanswered is what non-compliance will look like come 1 July. “What the commission has said, is that non-compliance ‘looks like a conversation where we start to more actively engage with the carrier around a sort of stepped approach to encourage them to meet the regulation.”
From IATA’s perspective Woodall says: “We do not think it looks like ‘you will not land, you will not enter’. But they will eventually run out of patience and they will eventually impose sanctions on the carrier and become more draconian as the days and weeks go by.”
