un/cefact an introduction to the work of the un centre for trade facilitation and electronic...

UN/CEFACTUN/CEFACT

An Introduction to the work of the UN An Introduction to the work of the UN Centre for Trade Facilitation and Centre for Trade Facilitation and

Electronic Business Electronic Business

Ray Walker OBERay Walker OBE

Chairman, UN/CEFACT Steering GroupChairman, UN/CEFACT Steering Group

Special Adviser on Trade Processes and Electronic Special Adviser on Trade Processes and Electronic

BusinessBusiness

to the UK Department of Trade and Industryto the UK Department of Trade and [email protected]@attglobal.net

OverviewOverview

What is the Centre’s Goals and Vision?What is the Centre’s Goals and Vision?

How did it start?How did it start?

How is it organised and how does it work ?How is it organised and how does it work ?

What is Trade Facilitation and what benefits What is Trade Facilitation and what benefits

does it bring?does it bring?

What are the key issues in e-business?What are the key issues in e-business?

Points to take homePoints to take home

UN/CEFACT’s UN/CEFACT’s Fundamental Goals and Fundamental Goals and

VisionVisionFundamental GoalsFundamental Goals

To accelerate the growth of global commerce so that the To accelerate the growth of global commerce so that the

economic benefits arising from it can sustain a secure, economic benefits arising from it can sustain a secure,

integrated, but diverse world, where there are no “divides” integrated, but diverse world, where there are no “divides”

and which is culturally respectfuland which is culturally respectful

VisionVision

Simple, Transparent, Effective Processes for Global Simple, Transparent, Effective Processes for Global

CommerceCommerce

UN/CEFACT – BackgroundUN/CEFACT – Background 1965: Early work on trade documents in Sweden1965: Early work on trade documents in Sweden 1968: UN task force established in Geneva1968: UN task force established in Geneva 1970: Working Party 4 established; Trade Facilitation work starts1970: Working Party 4 established; Trade Facilitation work starts 1973: Work starts on EDI (TDI)1973: Work starts on EDI (TDI) 1978: First global trade data elements directory published 1978: First global trade data elements directory published

(UNTDED); Legal work starts(UNTDED); Legal work starts 1983: First international EDI syntax published; 1983: First international EDI syntax published; 1987: UN/EDIFACT syntax approved as an ISO standard1987: UN/EDIFACT syntax approved as an ISO standard 1990: First UN/EDIFACT messages published1990: First UN/EDIFACT messages published 1996: Over 150 UN/EDIFACT messages developed and approved1996: Over 150 UN/EDIFACT messages developed and approved

www.uncefact.orgwww.uncefact.org

UN/CEFACT – BackgroundUN/CEFACT – Background 1997: UN/CEFACT established1997: UN/CEFACT established 1999: ebXML project launched1999: ebXML project launched 2001: ebXML approved.2001: ebXML approved.

To date over 30 practical Recommendations have been made To date over 30 practical Recommendations have been made to governments to improve Trade Facilitation and e-businessto governments to improve Trade Facilitation and e-business

Many Guidelines for best practice have been publishedMany Guidelines for best practice have been published

The use of Business Process Information Modelling unites the The use of Business Process Information Modelling unites the approach to both Trade Facilitation and e- business issuesapproach to both Trade Facilitation and e- business issues


UN/CEFACTUN/CEFACT- - OrganisationOrganisation Plenary: Centre’s highest decision making body Steering Group: Centre’s management and

coordination body Groups: Main bodies for undertaking or

supporting the work programme Working groups: Sub–element of a Group

dedicated to a specific work item Projects: Sub–element of a group or Working Projects: Sub–element of a group or Working

Group Group

UN/CEFACTUN/CEFACT- - OrganisationOrganisation Plenary is made up of delegations from UN member

states and international organisations representing the public and private sectors e.g. World Customs Organisation, International Chamber of Commerce, EAN International

All delegations have the same rights e.g. An international All delegations have the same rights e.g. An international organisation has the same rights as a member stateorganisation has the same rights as a member state

This is a very special feature which emphasises our This is a very special feature which emphasises our

objective of an open interface between public objective of an open interface between public organisations and private business organisations and private business

UN/CEFACTUN/CEFACT- - OrganisationOrganisation The Chair, and the 5 Vice Chairs (2 from ECE

member states, 2 from other UN regions and 1 from international organisations) are elected by the Plenary. Currently, the Chair is from Germany, and the Vice – Chairs are from Japan, Nigeria, UK, USA and the IAPH.

Steering Group (CSG) is also elected by the Plenary and is chaired a one of the VC nominated by the Chair and approved by the Plenary

CSG meets physically 4 times a year but works daily by e-mail

UN/CEFACT - WorkUN/CEFACT - Work ProgrammeProgramme

The current work programme includes the analysis The current work programme includes the analysis and modelling of business processes particularly and modelling of business processes particularly in global trade , the rationalisation of international in global trade , the rationalisation of international trade procedures, the development of electronic trade procedures, the development of electronic business exchange standards (e.g.UN/EDIFACT, business exchange standards (e.g.UN/EDIFACT, ebXML), coding, and associated legal aspectsebXML), coding, and associated legal aspects

It is carried out through empowered permanent and It is carried out through empowered permanent and ad hoc working groups and through joint venturesad hoc working groups and through joint ventures


Proposed New Group Proposed New Group StructureStructure

There will be five Groups, three operational and two in support.There will be five Groups, three operational and two in support.

Operational GroupsOperational Groups

Global Commerce Processes GroupGlobal Commerce Processes Group

Information Content Management GroupInformation Content Management Group

Standards and Technologies Application GroupStandards and Technologies Application Group

Support GroupsSupport Groups

Techniques and Methodologies GroupTechniques and Methodologies Group

Legal GroupLegal Group

The Groups and their The Groups and their Initial ConstituentsInitial Constituents

Global Commerce Processes Group – GCPGGlobal Commerce Processes Group – GCPG

Business Process Analysis (BPAWG)Business Process Analysis (BPAWG)

International Trade Procedures (ITPWG)International Trade Procedures (ITPWG)

Trade Facilitation Policy and Best Practice*Trade Facilitation Policy and Best Practice*

Specification of Common Business Processes (eBTWG)Specification of Common Business Processes (eBTWG)

Specification of Reference models (BPAWG/ITPWG)Specification of Reference models (BPAWG/ITPWG)

Specification of UN Recommendations (ITPWG)Specification of UN Recommendations (ITPWG)

* Proposed New Working Group* Proposed New Working Group


Information Content Management Group – ICMGInformation Content Management Group – ICMG

Semantic Rules*Semantic Rules*

Code Directories (CDWG/EWG)Code Directories (CDWG/EWG)

Library Management (eBTWG)Library Management (eBTWG)

Business Information Objects Reference Library (eBTWG)Business Information Objects Reference Library (eBTWG)

Catalogue of Common Business ProcessesCatalogue of Common Business Processes

Business Document Library (eBTWG)Business Document Library (eBTWG)

Core Component Library (eBTWG)Core Component Library (eBTWG)

TDID/TDED (EWG)TDID/TDED (EWG)



Standards and Technologies Group (STAG)Standards and Technologies Group (STAG)

Business Domain Groups (EWG)Business Domain Groups (EWG)

Cross Domain Harmonisation (EWG)Cross Domain Harmonisation (EWG)

Cross Domain Assessment and Approval (EWG)Cross Domain Assessment and Approval (EWG)

Technical Production and Maintenance (EWG)Technical Production and Maintenance (EWG)

Core Component Technical Specification (EWG/eBTWG)Core Component Technical Specification (EWG/eBTWG)

Design Rules (EWG)Design Rules (EWG)

Syntax Rules (JSWG)Syntax Rules (JSWG)

UN/EDIFACT Messages(EWG)UN/EDIFACT Messages(EWG)

XML Schemas/DTDs *XML Schemas/DTDs *



Techniques and Methodologies Group (TMG)Techniques and Methodologies Group (TMG)

UN/CEFACT Modelling Methodology-UMM (TMWG)UN/CEFACT Modelling Methodology-UMM (TMWG)

Base (Meta) Specifications (eBTWG)Base (Meta) Specifications (eBTWG)

Technical Research in Trade Facilitation and e-Technical Research in Trade Facilitation and e-

Business* (*/TMWG)Business* (*/TMWG)

* Proposed new activity* Proposed new activity


Legal Group (LG)Legal Group (LG)

Legal Processes and IssuesLegal Processes and Issues

UN/ECE Legal RecommendationsUN/ECE Legal Recommendations

Legal Guidelines and Legal Advice to Legal Guidelines and Legal Advice to

UN/CEFACT GroupsUN/CEFACT Groups

The UN/CEFACT ForumThe UN/CEFACT Forum

It is important to understand that neither the Operational It is important to understand that neither the Operational

or Support Groups are Silo’s. They are intimately related or Support Groups are Silo’s. They are intimately related

and collectively will be called and collectively will be called

The UN/CEFACT ForumThe UN/CEFACT Forum

The Forum will meet twice a year with all the Groups and The Forum will meet twice a year with all the Groups and

their Working Groups present. their Working Groups present.

ebXMLebXML

ebXML is set of interoperable specifications ebXML is set of interoperable specifications

developed by over a 1000 experts worldwide developed by over a 1000 experts worldwide

covering infrastructure ( the technology of covering infrastructure ( the technology of

message interchange) and content (the messages)message interchange) and content (the messages)

The specifications are freely available and are The specifications are freely available and are

being implemented by major vendors todaybeing implemented by major vendors today

www.ebXML.orgwww.ebXML.org

UN/UN/CEFACCEFACTT

SIMPLE, TRANSPARENT AND EFFECTIVE PROCESSES

FOR GLOBAL BUSINESS.

What are International Trade Transaction What are International Trade Transaction

CostsCosts??

The costs of meeting commercial, governmental, The costs of meeting commercial, governmental,

transportation and payment procedures in transportation and payment procedures in

international trade, compared with the costs of international trade, compared with the costs of

meeting the equivalent procedures in national trademeeting the equivalent procedures in national trade

Procedures are the collection, presentation,

communication and processing of information in

paper or electronic format

How do these extra costs How do these extra costs occur ?occur ?

Every international trade transaction involves a minimum

of 7 participants. They are: Exporter, Freight

Forwarder/Transporter, National Customs, Foreign

Customs, Importer, Importer’s Bank, Exporters Bank

All deep sea or air transactions have at least 10

participants (Add a minimum of 2 Air/Sea Ports and one

Carrier)

For movements that transit third countries add at least

another 2

How do these extra costs How do these extra costs occur ?occur ?

Each movement incurs procedural costs as it

moves along the transaction chain

Information exchange costs are very high e.g.

each deep sea shipment involves at least 24

documents/information exchanges

Over 80% of the information exchanged is the

same!

The International Trade Transaction The International Trade Transaction involves:involves:

ParticipantsParticipants

ProceduresProcedures

Documents especially aligned Documents especially aligned

documentsdocuments

Data exchange (EDI, XML)Data exchange (EDI, XML)

Example transaction: seaportExample transaction: seaport

[delivery_

order]

[lc_ request]

ImportForwarder

Import Shipping

Line

Exporter(Shipper)

Importer(Consignee)

Import LinerAgent

ExportForwarder

ExportShipping

Line

Export Liner Agent

IssuingBank

ImportCustoms

ImportPort Authority

ImportTransporter

ImportStevedore

[bill_lading]

[bill_lading]

[arrival_notify]

[goods_available]

[manifest]

[sto

wag

e_pl

an]

[customs_

release]

[customs_declare] [m

anifest]

[eta]

[discharge_permit]

[cargo_declare] [man

ifest

]

[eta]

[manifest]

[stowage_

plan]

ExportPort Authority

[manifest][stowage_

plan]

[ship_details]

[ship_

ins_act]

[manifest]

ExportStevedore

[load_list]

[load_instruct]

[manifest]

[pre

_arri

val]

[arri

val_

notif

y]

[ship_instruct]

[ship_request]

[manifest]

[bill_lading]

ExportCustoms

ExportTransporter

Insurance

CorrespondingBank

[bill

_lad

ing

]

[lc_

[ins_contr_req]

[ins_contract]

[remittance_advice]

[delivery_order]

[bill_lading]

[lc]

[exp_declare]

[exp_approval]

[commercial_Invoice]

[despatch_notice

[bill_lading]

[bill_lading][clearance]

[delivery_order][arrival_

notify]

[manife

st]

[bill_lading]

[stowage_plan]

[manifest]

[trans_notify]

[trans_interest]

exportimport

How much are the extra costs?How much are the extra costs?


Expressed as a percentage of invoice Expressed as a percentage of invoice

value, studies have shown that the value, studies have shown that the

extra costs are between 2% and 7 %extra costs are between 2% and 7 %

How much are the extra How much are the extra costs?costs?

7% 7% NCITD (USA) 1971 published study (deep sea markets) NCITD (USA) 1971 published study (deep sea markets)

2%2% SITPRO (UK) 1987 unpublished study (EU markets only) SITPRO (UK) 1987 unpublished study (EU markets only)

2%2% Cechini report (EC) 1988 published study (EU markets only) Cechini report (EC) 1988 published study (EU markets only)

4% 4% SWEPRO (Sweden) 1994 published study (all markets SWEPRO (Sweden) 1994 published study (all markets))


3 %3 % is probably a good working averageis probably a good working average

The actual costs will depend on the market and The actual costs will depend on the market and

on the level of Trade Facilitation measures in on the level of Trade Facilitation measures in

placeplace

Can these extra costs be Can these extra costs be reduced?reduced?


YES but it requires leadership,

knowledge and effort!


Most CEO’s have no experience of

international trade, and in general, little

interest in effective export practice

Some CEO’s also seem to think that “one size

fits all”


Applying Trade Facilitation and other

best practice techniques in can

substantially reduce the extra costs –

by up to 60%

What is Trade Facilitation?What is Trade Facilitation?

What is Trade Facilitation?What is Trade Facilitation?

It is the technique that improves the ability of entities

to exchange products and services through the

simplification, rationalisation, and whenever possible,

the elimination of procedures

Effective trade facilitation Effective trade facilitation is achieved through the

combination of : Rigorous analysis of the international trade transaction

process

Simple and efficient information exchanges

Skillful implementation of best practice within

companies

Effective cooperation between commerce and

government

Successful inter-governmental policy negotiations

Practical steps at border points

UN/CEFACT Simple, Transparent and Effective Processes for Global Commerce

What are the key issues in e-What are the key issues in e-business?business?

e-business:what is it?e-business:what is it?

It is the use of Information and Communication It is the use of Information and Communication

Technologies (ICT) to Technologies (ICT) to radicallyradically improve business improve business

and administrative processes and practicesand administrative processes and practices

But But it is not just about technologies; it is it is not just about technologies; it is

equally about equally about rationalisingrationalising and and integratingintegrating the the

underlying business processesunderlying business processes

e-business is already well e-business is already well established!established!

Globally EDI , Bar Coding, CAD/CAM are Globally EDI , Bar Coding, CAD/CAM are

widely used in all sectors of industry and widely used in all sectors of industry and

commerce.commerce.

EDI, especially UN/EDIFACT, is also EDI, especially UN/EDIFACT, is also

extensively used in many government extensively used in many government

departments worldwide e.g. Customs, departments worldwide e.g. Customs,

Purchasing, Healthcare, Statistics, etc. Purchasing, Healthcare, Statistics, etc.

e-business developmentse-business developments

Collaborative business concepts (e.g. online Collaborative business concepts (e.g. online

exchanges) and supporting applications, exchanges) and supporting applications,

including Portals, with contract, transaction including Portals, with contract, transaction

and security tools, are appearing almost on a and security tools, are appearing almost on a

daily basisdaily basis

In this development frenzy it is very easy to In this development frenzy it is very easy to

lose focuslose focus

e-business:what should I e-business:what should I focus on?focus on?

Framework issues need to be carefully consideredFramework issues need to be carefully considered

Interoperability - deploying products that are built on Interoperability - deploying products that are built on

open standards and which can work together - is open standards and which can work together - is

criticalcritical

Agreeing common data definitions, with precise and Agreeing common data definitions, with precise and

unambiguous meanings, and using them in all unambiguous meanings, and using them in all

exchanges with business partners is the foundation exchanges with business partners is the foundation

of successof success

e-business: what are the e-business: what are the framework issues?framework issues?

Relevant LawRelevant Law

Trust & SecurityTrust & Security

Intellectual property rightsIntellectual property rights

PrivacyPrivacy

Consumer protectionConsumer protection

ICT StandardsICT Standards

In today’s world information standards In today’s world information standards are absolutely critical to interoperability are absolutely critical to interoperability and, therefore, the key to the success of and, therefore, the key to the success of

e-businesse-business

In particular, structured information In particular, structured information

exchanges are exchanges are fundamentalfundamental

UN/CEFACT Simple, Transparent and Effective Processes for Global Commerce

un/cefact an introduction to the work of the un centre for trade facilitation and electronic...

Documents

trade processes

trade documents

early work

work programme

uk department of trade

e business issues

unedifact syntax

unedifact messages