Facilitating Trade:
Improving Customs Risk Management Systems
In the OIC Member States
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The tactical and operational levels of risk management are commonly referred to as risk
analysis, which should ideally cover all aspects from identifying and quantifying risk, to
determining the risk, to monitoring the effect of any intervention (i.e., control measure). The risk
analysis is important to iteratively improve the accuracy of the identification and quantification
of risks.
Figure 2: Strategic, tactical and operational level of CRM
Source: Author’s compilation
2.2.2 Risk Management Cycle
WCO Risk Management Compendiu resents the risk management cycle as a perpetual cycle
(Figure 3). It starts with three risk assessment steps (risk identification, analysis and evaluation,
and prioritization), and continues with preparation/ profiling, targeting, covering/treatment,
evaluation of outcomes/feedback.
The first three steps of the cycle all relate to the assessment of risks. Risk assessment is the
estimation of the risk level or degree in any customs activity; given the probability of risky
events and their consequence. More specifically, the risk assessment covers three important
steps of the risk management process: identification, analysis, and evaluation and prioritization.