Paperless TF for SMEs – part II

Policy frameworks

And

ICT applications

1

Agenda

• Policy frameworks

– competitive and resource efficient TF system

– 1 target, x indicative goals to guide policy action and xx initiatives for implementation

• ICT applications in transport and trade

– NSW

– Regional Single window

2

Framework must address …– lack of interoperability along the global value chain

– Reduce need to provide information several times for different purposes

– Increase information availability through single platform & for multiple agencies/ users

– Improve integration of information between trade and transport (eg track and trace technologies and intelligent cargo applications)

– Identify and continuously guide documentation efficiencies, costs reduction, better visibility of freight, less perceived complexity for multimodal transport (and trade)

3

• Target - 0 paper documents and flows, 0 waiting time at hubs, technology independent

• Goals - Interoperability (standardised solutions), common platform for information exchange, robust legal framework (for data security and protection), one stop shop for admin procedures

• Initiatives - Common reference model (BSP model), Single window,

Multimodal e-waybill, e-delivery infrastructure

4

Building on Existing Initiatives (1)

• “Most progressive” regional TF initiatives– ASEAN

• ASEAN Single Window initiative

• MRAs for conformity assessment

– APEC• TF Action Plans

• IAP Peer review mechanisms

– ESCAP• MAY 2012: Resolution 68/3 on Cross-Border Paperless Trade

Facilitation Towards regional arrangement(s)• http://www.unescap.org/commission/68/documents/English/2012-Resolutions-E68_24E.pdf

• APTA

5

• Asia-Pacific Trade Agreement (APTA)

– Links East, Southeast and South Asia

– TF Framework Agreement

– Simple and common RoOs

• Simple and common Rules of Origin with minimum local value requirement of 45% f.o.b.

Building on Existing Initiatives (2)

Current Members:BangladeshChinaIndiaLao PDRRepublic of KoreaSri Lanka

Disclaimer: The boundaries shown on this map do not imply official

endorsement or acceptance by the United Nations.

6

Common Reference Framework

ITS

TAF/

TSI

RIS

eMar

itim

e

Corridor Management

Transport Supply

Transport Demand

Supply

chain

security

and

Compliance

Transportation

Network

Management

(Co-operative

Systems)

TPS

TSD TEP GII TES MWB

CRS

SDM

7

WCO Data Model & UN/CEFACT Standards

WCO Data Model

Data Elements

International Code Standards

Message Implementation

Guidelines

WCO Data Model v 3.0

XML Schemas / messages

Other readers, Guidelines etc

Business Process Models

UN/CEFACT Standards

UMM, Buy-Ship-Pay Model

UNTDED

UN/ECE RECOMMENDATIONS•No. 7: REPRESENT OF DATE AND TIME

•No. 16 : UN/LOCODE

•No. 20 : UNITS OF MEASURE UN/EDIFACT

•No. 28 : MODE AND TYPE OF TRANSPORT

• etc

UN/EDIFACT

GOVCBR

UN/CEFACT CCL

8

UN/CEFACT Recommendations

Single Window (Rec 33)

Rec: 6,11,12,14,18,22,26

SADWCO

Rec

IATA

AWB…

UNTDEDCore

Components

UN/EDIFACT

Data Level

Single Window, Paperless Trade …

Capacity building and projects by UN System…

Revised Kyoto Convention, WTO, eTIR …

Framework

for Data

Exchange

XML/EDI

Schemas,

Paper Forms

Data

Model

Reusable

ElementsUN Layout Key

Code lists Rec …

UMM, CCTS, XML NDR

ISO 9735(EDIFACT Syntax) …

Paper Electronics Business

UNECE – UN/CEFACT Integrated Framework

of Standards for Paperless TradeTrade Facilitation

Layers

Generic

Inter-

change

Policy

(National,

Regional,

Sector)

Imple-

menta-

tion

9

Process Analysis

and Simplification

National Data

Harmonization

Cross Border

Data

Exchange

Single

Window

•Business/Political Process - Collaboration Between Trader and

Government (UN/CEFACT Rec. 4, Rec. 18), Revised Kyoto Convention

•UN/CEFACT International Supply Chain Reference model,

•Unified Modeling Methodology (UMM), Business Process Analysis Guide

•Global Facilitation Partnership for Trade and Transport (GFP) Audit

Methodology

UN Layout Key, Master Document,

UNTDED, TF Toolkit and Forms

Repository

UNTDED, Core Component

Library, UN/LOCODE and code

lists

Data Model based on

International Standards

(e.g. WCO DM)

Rec 33, SW

repository,

(Rec 34,35)

Document

Simplification and

Standardization

Implementing Single Window Using UN/CEFACT and WCO Standards & Recommendations

10

11

Single Window Phased Development Approach

Other country NSW

NSWInternet

Ministry of Agriculture

Ministry of

Commerce

Sea Port

Airport Bank

1st Cycle: Customs Clearance + Permits & Certificates Issuance

Insurance

Shipping line

AirlineCustoms

2nd Cycle: Transport + Financial Settlement

3rd Cycle: Cross-border Paperless Trading

Cross Border Exchange of data between Single

Windows

11

NSW

12

13

• International Instruments related to TF

• New Tools

• TF reform

• How to start

14

• Transport corridors and trade channels

• Supply chain management model

• Core elements:– Goods movements rather than paperwork– Operational issues not only controls

• Main outcomes:– Integrated approach on processes– Single international transaction

Recent evolution

15

Traditional definition

• Simplification and harmonization of international trade procedures and documentation

• Core elements:– Documents as support of information

– Procedures as information processing

• Main outcomes:– Simplified documents, data and codes, protocols

16

• TF is just a matter of bureaucracy

• TF is inexpensive & easy to implement

Potentially Misleading Beliefs

17

Arrival Notice

Letter of

Instruction

Invoice, PO

Importer’s

Bank

Ocean Carrier

Customs House

Broker

Line of Credit

Proforma Invoice

Shipping & funding detail

Cargo

Status

Vessel Booking Request

Cargo

Status

Shipping & Funding Detail

Exporter’s

Bank

Importer Exporter

Vessel Booking Confirmation

Bill of Lading

Rated Bill of Lading

Dock Receipt

Freight Forwarder /

NVOCC

Purchase Order

LC

Confirmation

AES

Dock receipt

Pick-up & Delivery Order

Vessel Manifest

Dock receipt

Release/Approval

Demurrage

guarantee &

payment

Inland

Carrier

Manifest

Pick-up &

Delivery Order

Importer Notice

Converted Vessel

ManifestCustoms (Export)

Port

Customs ( Import )

Original B/L,

Invoice, PO,

Packing List

Inland

Carrier

Marine

Insurance

Company

Fund Transfer

Confirmed Line of Credit

Release/Hold

Notice

Purchasing Export Import

Import

Terminal

Operator

Proforma Invoice

Export Declaration

Export Declaration

Bill of lading, Documentation

Import

Docs

Export

Terminal

Operator

• Up to 20

Involved

Parties

• 200+ data

elements

• Manual data

exchange

processes

• Multiple

data

platforms

• 30+

documents

or messages

• 60-70%

repetitions

• 6-15% of the

final value of

the goods

• 40% of the

transaction

time

Data Flow for International Trade

18

International Instruments related to

Trade Facilitation

19

• ICC International Customs Guidelines;• ICS rec. on B/L and ship’s manifest;• IMO FAL Convention;• IMO: other conventions with TF relevance (7);• Relevant ISO Standards;• UN/ECE (& UN/CEFACT) Recommendations;• UN/ECE TIR Convention;• UN/ECE CMR Convention;• WCO: Revised Kyoto Convention;• WCO: Istanbul Conv. (Temporary Admission);• WCO: Nairobi Conv. on Prevention, Investigation &

Repression of Customs offences;• WCO: Various other WCO Customs Conv. (9);• WCO: Various non-binding WCO rec. (5);• Free trade agreements and/or Customs unions.

Instruments outside WTO

20

Agreement on the Implementation of Article VII GATT 1994 (Customs Valuation)

Agreement on Preshipment Inspection

Agreement on Import Licensing Procedures

Agreement on Rules of Origin

Agreement on Technical Barriers to Trade

Agreement on Sanitary and Phytosanitary Measures

Existing WTO rules on trade facilitation

21

New Tools available

22

Trade Facilitation Platforms

• National and Regional Trade and Transport Facilitation Committees:structures for dialogue with private stakeholders, inter-agency coordination and high level policy coherence at national level in the design of administrative reforms.

• WTO Trade Facilitation Support Groups: as coordinating mechanisms to support national negotiators in Geneva through the provision of technical expertise and feedback on tabled proposals.

• Transit corridor facilitation clusters: as operational multi stakeholders multi national cooperative platforms to assess obstacles, design and implement solutions to improve transport corridor operations and management.

23

Repository of Trade Facilitation Working Groups

• A joint initiative by UNCTAD and UNECE for a repository of national working group on trade facilitation, provides a collection of country's experiences in setting up and maintaining national inter-agency public private consultative trade facilitation mechanisms

See:http://r0.unctad.org/ttl/repository/TFWGintro.htm.24

Clusters along Transport Corridors

Shipper

Freight Forwarder

Customs

Carrier

Cluster

25

Ulaanbaatar

Tianjin Port

Time/Cost – Distance Methodology

26

Zamyn Uud

1000 km

Average speed

22.4 km/h

Tianjin, 0 km

75 hrs 31 min.

500 km 1000 km 2000 km1500 km

Day 4

1,691 km33.7 km/h

04.18 a.m.

Day 3

Day 2

Day 1

29 hrs 12 min.

Erenhot, 983 km

02.30 a.m.

05.59 a.m.20 hrs 31 min.

Ulaanbaatar1700 km

Shunting + train formation:

3 hrs. 35 min.

Transshipment:(3.5 min. per box)

3 hrs. 20 min.

4 hrs. 50 min.Mongolia,

China, 3 hrs. 00 min.Customs:

Example: Tianjin-Ulaanbaatar Railway link

27

Cost per TEU

$131$100

$293

$155 $124 $200

$650

$0

$100

$200

$300

$400

$500

$600

$700

Lao PDR-Thai

Lao PDR-Viet Nam

Mongolia-China

Mongolia-Russian Fed.

Nepal-India

Kazakhstan-Russian Fed.

*Uzbekistan-Turkmenistan

* Estimated from cost of standard European 12 meter semi trailer.

Border Crossings: Cost or Time

28

UNCTAD Liner Shipping Connectivity in 2009

Maximum vessel size

TEU

Vessels

Services

Companies

70

80

90

100

110

120

130

140

150

160

2004 2005 2006 2007 2008 2009

Source:http://www.unctad.org/transportnews29

Trade facilitation reform

30

Reform Policy Objectives

• External commitments:

– Bilateral and regional agreements

– WTO

• Internal objectives:

– Administrative effectiveness

• Better trade management

• Better use of public resources

– Trade competitiveness

• Support national trade sector

• Lower transaction costs

31

Common Reform Phases

• Definition of goals to achieve the objectives

• Analysis of the capacity of the current processes to achieve the goal

• Analysis of required actions to fill the gaps

• Assessment of needs/resources for identified actions

• Design of individual processes

• Development of comprehensive plan

• Implementation of the solution

• Operation and maintenance of new system

32

SMEs face issues in …• Staffing: manpower / technical skills

• Technology: equipment and training

• Institutional: functions, interactions and management

• Regulatory: authority and mandates

• Budgeting costs / revenues

• All the above for three different levels:

– Planning and monitoring unit : goals – analysis – solution - sequencing

– Design and development units: analysis and process development

– Implementation units: operation and maintenance of the system

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Sequences to introduce reform

• Function sequence depends on:

• Steps to take before

• Impact on consecutive processes

• Priority sequence depends on:

• External commitments

• Other defined objectives

• Time sequence depends on:

• Priorities

• Resource deployment

34

Three dimensions

TradeFacilitation

TRADE TRANSPORT

CUSTOMS

35

CUSTOMS dimension

Customs Facilitation

Customs Reform

and Modernization

Support automated

data systems

faster clearance

of cargo

Increased Customs

revenues

Simplify/harmonize

documents & procedures

Implement modern

Customs laws

ASYCUDA 36

TRADE dimension

Trade Facilitation

Best-recommendedcommercial practices

faster RoI for IMP

Competitiveexports

Simplify IMP/EXPdocuments & procedures

Create awareness onbest practices

PromoteSingle Window

37

TRANSPORT dimension

Transport Facilitation

Faster turn-over

of means

smooth movement

of goods

Create awareness on

modern transport & logistics

Establish norms

(incl. liability insurance)

Implement modern

Transport laws

Implement logistics tools

Best-recommended

transport practices

38

One approach

• Use Public Private Partnership (PPP) model with a view to – reduce cost of doing business,

– reduce bureaucratic tangles,

– reduce cumbersome process of paying taxes,

– create a hassle free business environment and

– increasing revenue by ensuring transparency and accountability

• Measureable outcomes – Improved efficiency, save time for each stakeholder,

improve productivity, accountability and compliant to WCO, introduce world class IT infrastructure

39

Measurable outcomes

• Reduce cost of doing business by at least 70%

• Save customs processing time by 80%

• Cut down customs procedures to 6 steps from say existing 31

• Monitoring international and domestic prices

• Transparency and level playing field ensured

• Minimize risk & ensure better service delivery of customs department

40

Peripheral activities• Harmonization of trade documents

• Adoption of HS nomenclature and use of internationally agreed standard data elements

• Online publication of relevant trade regulations and procedures, including fees and charges, in the local language and in English

• Establish national trade facilitation committee

• Establish enquiry points and single national focal points for trade regulations and other trade facilitation issues, and

• Create effective appeal procedure for Customs and other agencies rulings.

41

How to start

42

The regulation maze

Layers of

communication

systems

Layer

characteristics

Relevant

regulations and

policies

Relevant fora for

international

negotiation/coordi

nation/debate

Content layer Services, images,

and applications

transmitted by the

network

Cyberlaws, taxation,

IPRs, consumer, privacy

and data protection,

competition law, content

regulation, trade

policies

WTO, OECD,

WIPO…

Code layer Protocols and

software that make

the network run

Internet governance,

competition policy,

IPRs, standards

ICANN, ISOC,

ITU, WIPO…

Physical

infrastructure layer

Wires, cables,

computers,

satellites… across

which bits of

information travel

Telecom regulation,

competition policy,

IPRs, trade policies,

standards

WTO (BTA, ITA),

ITU, WIPO…

43

ICT applications for facilitate trade for SMEs

44

For SMEs, the issue is focused on

• coverage/affordability of infrastructure / platform for development and maintenance

• Regulatory environment: progress + complexity (cyberlaws, security, PKI, IPRs, content regulation, e-payment infrastructure, privacy…)

• Digital literacy: institutional constraints in the educational sector + IT HR development at firm level

45