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Duty Recovery & Contraband Detection:

New Technology for Improved Results

WCO IT Conference 2014

Trey Sieger

Thermo Scientific

[email protected]

+1.202.669.3284

2

Agenda

1. Introduction

• Lab to the Field

2. Duty Recovery

• Chemicals

• Elements/Metals

3. Regulatory Enforcement

4. Contraband

• Accelerating Trends in Illicit Drugs

• Explosives & Programme Global Shield

3

Customs: Technology Toolbox

X-Ray Radiation Detection

RFID

Security Tags

GPS Tracking Secure Labeling

Risk/Data

Management

Document Scanning

Focus to date:

Detection that

“something” is wrong

Next:

WHAT IS THAT

SOMETHING?

Yesterday:

Send it to inspection,

then forensics lab.

Wait…

Handheld

Chemical/Elemental

Analysis

4

The World Leader in Serving Science

We are the leading provider

of analytical instruments, equipment, reagents

and consumables, software and service for research,

analysis, discovery and specialty diagnostics

Scale • Over $12 billion in revenues

• 40,000 employees in 40 countries

• 350,000 customers in 150 countries

• #227 on Fortune 500

• Top 100 of the non-financials

Depth of Capabilities • Innovative technologies

• Applications expertise

• Laboratory productivity partner

Leading Brands

5

Meeting Growing Needs in Many Applications

Accelerating

Lab to Field

Metal Alloy ID

• Recycling, PMI,

fabrication, QC/QA

Regulatory

• Lead paint,

environmental,

consumer product

safety

Safety & Security

• Explosives identification,

unknown threat

screening

Mining

• Exploration, ore grading,

ore trading

Pharma/Chem

• Raw Material

ID, counterfeit

drugs

Narcotics

• Crime scene investigation,

local police, border agents

• New application

• Building Awareness

Food/Feed/Ag

• Moisture, fat, protein for feed

producers

• New application

Precious Metals

• Non-destructive

identification of

precious metals

6

More than 40,000 Thermo Scientific portable analytical instruments in

use daily in more than 75 countries on six continents.

Worldwide Service and Support

A dedicated network of more than 100 distributors and 30 factory-trained service centers around the world

7

Which would you choose?

Many steps or 1 step

Hard or Easy

Slow or Fast

Complicated or Simple

Efficient or Inefficient

8

What’s in the package?

or

Answers in:

Weeks or Minutes

9

Illegal drugs?

Explosives? Precursors?

Mislabeled/smuggled goods?

Regulated chemicals?

Precious metals? Fake medicines?

What’s in the package?

10

What’s in the package?

Fundamental Truth:

If it’s fast and easy,

officers will check more often.

=

1. Increase duty collections.

2. Stop more contraband.

3. Improve regulatory enforcement.

4. Speed up trade.

11

INCREASING DUTY RECOVERY

High Value Chemicals, Precious Metals

Worth paying attention:

• Global average, Customs duties represent 11.5% of total tax

revenues (based on reporting countries)

• in many developing countries it can be as high as 20-30%. - World Bank, 2012 data set

12

Duty & Tariff Collection

• Duty avoidance /

Mislabeled Goods

• High value chemicals

• High value precious metals

?

13

How do you respond?

• What is it?

• What next?

14

How do you respond?

Sodium Sulfide

Sugar

Titanium(IV) oxide

Ammonium Nitrate

Nitric Acid

Chemical

Identification

$250 p/kg

High duties

High duties

15

Operation: Dual Use Modes

Point and Shoot

Vial Mode

16

FirstDefender RM: Handheld Raman

• Technology: Raman spectroscopy + embedded analytics

• +12,000 units in the field world wide

• 12,000+ Chemical library

• Explosives

• Toxic Industrial Chemicals

• Narcotics

• Chemical Weapons

• Precursors

• Rugged & Lightweight

• Waterproof & chemical resistant

• Tested per MIL-STD-810F

• -20 C to +40 C Operation

• MTBF >6 years

19

Clear results

NFPA 704

Diamond

CAS #

Chemical

Category

Pure chemical match

• Color coded

• “Tag” priority items

• Automatic mixture

analysis

Mixture Present

20

Chemical ID: Over 10,000 units in the field

Customs, Military EOD & CBRNE, Police Forensics, Fire HazMat units:

• Key US Customers

• U.S. Military (Air Force, Army, Marine Corp, National Guard)

• Bureau of Alcohol Tobacco and Firearms and Explosives

• Department of Homeland Security – Customs & TSA

• Federal Bureau of Investigation (FBI) HazMat & EOD

• Global users:

• Australian Customs

• Australian Defense Force & Federal Police

• Singapore - Customs,HSA & Civil Defense

• Dutch Customs

• German Bundespolizei

• Japanese Ministry of Defense (MOD)

• United Kingdom Ministry of Defense (MOD)

• Royal Norwegian Ministry of Defense

• Indian Police & Mumbai Airport

21

Duty & Tariff Collection

• Duty avoidance /

Mislabeled Goods

• High value chemicals

• High value precious metals

?

22

Precious Metals: Clear, Fast Answers

Karat $ per kg

8 $13,937.03

18 $31,361.45

24 $41,773.45

May 4, 2014 based on $1300.6 p/troy oz

Gold Value

India: 85 kg of gold seized

by Customs during Jan-

Mar, 2014. In 2013, only

6.8 kg of gold was seized in

the first three months.

- Mineweb, Mar 2014

23

Niton XRF Users at the Border

• USA - Consumer Products Safety

Commission

• USA - Customs & Border Protection

(Washington DC, San Juan, Indianapolis,

USA)

• Mexico - Customs

• Check alloys upon import/export

• Jewelry analysis to ensure proper payment

tax payment on accurate grade of Gold

• UAE - Customs

• The Netherlands - Customs

• State Agency for Metrological and

Technical Surveillance (SAMTS)

• Estonia - Consumer Protection Board

• Germany - Labour Inspectorate at the

District Government of Central

Franconia

• Greece - Ministry of Development,

General Secretariat for Consumer Affairs

• Italy - Superior Institute of Health

• Lithuania - State Non Food Products

Inspectorate

• Slovakia - Slovak Trade Inspection

• Czech Republic - Public Health Prague

• Norway – Norwegian Institute of Health

• Serbia - Ministry of Environment (used

at customs border control & other areas)

• Canada - Health Canada

• China - Customs Lab

Over 30,000 in use every day

24

REGULATORY ENFORCEMENT

25

Fake Medicines

Counterfeit

Drugs

Substandard

Drugs

• Low quality product • Degraded

• Insufficient ingredients

• Incorrect ratio of ingredients

• Wrong ingredients

• Lack of registration or

documentation

• Willfully mislabeled • As to identity or source

$75B- $200B

market/year

26

Is this what it is

SUPPOSED to be?

27

Regulatory - Consumer Product Safety

http://www.niton.com/en/toys-consumer-goods-screening-with-handheld-xrf/applications/cpsc-video-file

Lead Paint Rare Earth Minerals

“as much as 20,000 tonnes, one-third

of the total volume of rare earth

elements leaving China in 2008 had

been smuggled out of the country.

- Royal Society of Chemistry, 29 Oct 2010

28

CONTRABAND

Drugs, Explosives, & Dual-use Precursors

29

Accelerating Growth of New Drugs

• More new drugs every year,

predominantly:

• Synthetic cannibinoids

• Cathinones

• Phenethylamines

• Often shipped from internet

Number of new psychoactive substances notified to the European early warning system under Council

Decision 2005/387/JHS; Source: EMCDDA 2012

30

New Drugs – Crossing Borders

Global Emergence of New Psychoactive

Substances - up to July 2012

• Manufacturing source countries

• Trafficking Routes

• End-use countries

Source: United Nations Office on Drugs and Crime, The Challenge of New

Psychoactive Substances (Vienna, March 2013).

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TruNarc • Clear results

• 3-button operation

• No touch scanning

• Narcotics, synthetics,

cathinones, precursors,

& other controlled

substances

• Automatic reports

Narcotics Screening

32

How the TruNarc Analyzer Collects Information

Computer Detector

Spectrum of the powder in the bag

Laser

33

What is a Spectrum?

Just like we

match

fingerprints in a

database of

known criminals

We match

chemicals to a

database of

suspect

chemicals

91

4.8

5

16

83

.44

1

75

2.2

7

16

08

.44

OH

34

How the TruNarc Analyzer Identifies a Spectrum

Computer Detector

Looking in the library for a matching spectrum

Match found!

Laser

Caffeine

?

Cornstarch Cocaine HCL

35

36

WCO Global Shield: High Risk Chemical Precursors

37

High-Risk Precursors – Priority & Opportunity

• Precursors tend

to travel farther

than finished

HMEs

• More opportunity

for interdiction T

ime

Distance

Legal manufacture of

precursor materials

Manufacture

of HME

Subversion

to illicit intent

Opportunities

for interdiction

Potential

Detonation

Required for Success:

Training/SOPs

Intelligence

Technology in the field

38

Why Do We Need Technology in the Field?

Possible threat Unclear Clear threat

39

Index Chemical Name Raman FTIR 1 Acetic anhydride Y Y 2 Acetone Y Y 3 Aluminum powder* N (requires XRF) N (requires XRF) 4 Ammonium nitrate Y Y 5 Calcium ammonium nitrate** Yes, as a mixture Yes, as a mixture 6 Hydrogen peroxide Y N 7 Nitric acid Y Y 8 Nitromethane Y Y 9 Potassium chlorate Y Y

10 Potassium nitrate Y Y 11 Potassium perchlorate Y Y 12 Sodium chlorate Y Y 13 Sodium nitrate Y Y 14 Urea Y Y

Program Global Shield: High Risk Chemical Precursors

* Metals, such as aluminum, are not amenable to Raman or FTIR analysis.

** The components of calcium ammonium nitrate (calcium carbonate + ammonium nitrate) are currently in the

FirstDefender RM library as individual chemicals, which would both appear in a result labeled as a mixture.

“Tag” priority items

40

SUMMARY

41

Summary – Field Technology Helps Customs

Interdict core drugs &

new synthetics

Identify explosives &

precursors (Programme Global Shield)

Increase duty & tariff

collection

Improve regulatory

enforcement

2

3

1

42

Please visit our booth for further discussion.

Trey Sieger

[email protected]

+1.202.669.3284

THANK YOU

43

APPENDIX

Trey Sieger

[email protected]

+1.202.669.3284

44

Chemical Weapons Treaties

Chemical Weapons Convention Overlap with Thermo Scientific – PAI Instruments

FirstDefender RM

(Raman) TruDefender FT

(FTIR) Schedule 1 46% 35% Schedule 2 35% 24% Schedule 3 76% 47%

Australia Group – CW Precursors Overlap with Thermo Scientific – PAI Instruments

FirstDefender RM

(Raman) TruDefender FT

(FTIR) Australia Group 68% 56%

Organisation For The

Prohibition Of Chemical

Weapons (OPCW)

Prohibits the development,

production, stockpiling, and use

of chemical weapons.

www.opcw.org

Informal forum of countries

which, through the

harmonisation of export

controls, seeks to ensure that

exports do not contribute to the

development of chemical or

biological weapons.

www.australiagroup.net

45

3rd Party Explosives Evaluation

• James T Thurman (Tom Thurman)

• 30 Year FBI Field Agent and Explosives Laboratory Chief

• Hundreds of Investigations Include:

• U.S. Embassy in Lebanon 1983

• Pan American Flight 103 over Lockerbie, Scotland 1988

• World Trade Center Bombing 1993

• Eastern Kentucky University Professor

• Author “Practical Bomb Scene Investigation”

• Advisor and Trainer for many agencies worldwide

• 6 Test Sites

• University of Rhode Island, Center of Excellence for DHS Explosives Research

• Eastern Kentucky University

• Federal Bureau of Investigation

• Loudoun County VA Fire Marshall

• Skylighter; Firework & Pyrotechnic Manufacturer

• DHS, TSA (Transportation Security Admin), Atlantic City, NJ

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Explosives : Evaluation Results Summary

• 231 Samples, categorized into four groups

• Three possible results

• Positive Match, Green Screen: Positive Identification

• Mixture Result, Blue Screen: Mixture Identified

• No match Found, Red Screen: Not in library, fluorescent or operator error

Category Positive Match

Green Screen

Mixture Result

Blue Screen

No Match

Found

Red Screen

Summary

Commercial Explosive 17 3 4 24

Explosive Component 101 6 9 116

HME 16 5 2 23

Military Explosive 53 5 10 68

Grand Total 187 (81%) 19 (8%) 25 (11%) 231

89% (206/231) Positive Identification

Full report available

47

How Handheld XRF Works

48

Handheld XRF Total Element Range