Step-by-step establishment of a Single Window: The need for interagency cooperation and a Master plan, key role of international standards

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1 Kishinev, November 6, 2012 Step-by-step establishment of a Single Window: The need for interagency cooperation and a Master plan, key role of international standards Mario Apostolov, Regional Adviser on Trade, UNECE mario.apostolov@unece.org

2 Doing Business database Сross-border trade Ukraine Year Rank Export documents (number) Export time (days) Export costs (US$ per container) Import documents (number) Import time (days) Import costs (US$ per container) Moldova

3 Objectives of implementing a Single Window system: 1. Efficiency of trade operations and functioning of state bodies 2. Transparency and tackling corruption 3. Increased transit and revenues from transit 4. Increased volume of foreign trade & revenue from export, investments and new technologies 5. Integration with Europe and world markets Draft legal acts for consolidating the political will. Start of SW introduction.

4 "Single Window" Rec.33 A system that allows all participants in international trade and transport to file all required information simultaneously, in one place, in standard form and to one agency 3-a: 'Single Authority' Trader (incl. Transport) Authority 1 Electronic Single Authority Authority 2 Authority 3 Paper Authority 4

5 One-Stop-Shop Concept Control authorities located physically at one place Customs Border- Freightguards forwarders Phitosanitary Transport Bank

6 Single Window on two levels: National (regulatory Single Window) G2G B2G Local (port community system) G2G B2G B2B The information collected consists of 95% business data and of 5% data received from state bodies

7 Port Communication System FROM TO Terminal Customs Forwarder Terminal Forwarder Handling Shipper Customs Health care service Agriculture Port authority Carrier Importer PCS Inspection agencies for: - Health care - Agriculture - Technical standards Consignee Carrier Rail Shipping Road Warehouse

8 Japan: changes in port communication system, October 2008

9 Two directions of work: ~80% negotiations ~20% technical work Political work Building the political will Drafting concept paper and feasibility study Appointing a lead agency (e.g. customs) Harmonization of policies Technical work Data Harmonization Developing an electronic EW system Alignment with international standards. Interagency management team Interagency technical team

Roadmap of Single Window in five stages of evolutionary development Level 1: Paperless Customs + electronic payment of customs duties + e sheet of container loading + accounting risks Level 2:

10 Roadmap of Single Window in five stages of evolutionary development Level 1: Paperless Customs + electronic payment of customs duties + e sheet of container loading + accounting risks Level 2: Connection to the information systems of other regulatory agencies (linking paperless customs and supporting documents (electronic certificates, permits) with the system) Level 3: e document flow between parties concerned within (air or maritime) port communities Level 4: Integrated national logistics platform allowing traders and logistics providers to share information Port community information interchange Level 5: Regional information exchange system Other regulatory authorities to exchange electronic permits and electronic certificates Paperless Customs National electronic logistics platform Traders Regional information exchange system and crossborder paperless trade Banks for diverse electronic payments Insurance companies Forwarders and logistics providers Importer / Exporter / customs broker / representative / other stakeholders Интернет Internet Note: in many states Level 3 has been developed to Level 2 NSW Airlines Duty free zones The administration of the airport / port, etc. Shipping agents Terminal operators

11 Step-by-step construction of the system Cross-border data exchange Information exchange with businesses Gathering information for other regulatory bodies Harmonization of cross-border data exchange Document by document connection to the system. Integration of data Document by document connection to the system. Integration of data Electronic Customs Introducing electronic export declaration

12 Single Window in the fyr Macedonia Objective Facilitation of trade by introducing a single point to fulfill all the requirements for cross-border trade Improving effectiveness of control measures Cost reduction (due to more efficient use of resources) Coverage: First, all the licenses before the Customs declaration Later: including processes and documents directly connected with import, export and transit of goods Development stages: 1. Analysis (March 2007 June 2007) 2. Harmonization and standardization(may 2007 May 2008) 3. Feasibility study and project plan (July September 2007) 4. Introduction (October October 2008) 5. Launch - 1 November 2008

13 Search for required licenses and responsible body, CN code Public Information Portal

14 My company s portal Participants of foreign economic activity entering the EXIM-system upon registration Customs Administration of the Republic of Macedonia

15 EXIM users Business Importers Exporters Carriers Brokers Freight forwarders Government 1. Customs authorities 2. Department of the Interior 3. Ministry of Agriculture 4. Phyto-sanitary control 5. Food and Veterinary Authority 6. State Inspectorate for Agriculture 7. Department of Seed and Planting Material 8. Medical agency 9. State Sanitary and Hygiene Inspection 10. Ministry of Economics 11. Bureau of Metrology 12. Ministry of Environment and Spatial Planning 13. Ministry of Culture 14. Division of Radiation Safety 15. Ministry of Transport and Communications

16 Services EXIM allows economic operators to obtain 60 documents / licenses from a single point, fulfilling the requirements of public bodies involved in the import, export and transit of goods EXIM provides a real time check of the validity of the decisions made by Customs EXIM enables electronic submission of applications for tariff quotas and real time monitoring of the allocation EXIM provides interfaces for data exchange with other government agencies and centralized management of the necessary reference data EXIM includes interactive services with the new systems of phytosanitary and veterinary inspection EXIM provides confirmation and control of transport licenses EXIM includes standards of IT security for paperless environment

17 SW in Moldova? 3-a: 'Single Authority' Trader (incl. Transport) Authority 1 Electronic Single Authority Authority 2 Authority 3 Paper Authority 4

18 Customs Information System Frontiera - CIS "Frontiera" shall be introduced in order to enable communication with the border police database and to avoid double information input. Pilot project at the border checkpoint Leuseni-Albita - Customs will help the Ministry of Agriculture to implement its IT system as soon as the problem of information exchange is sold. - CIS "Frontiera" has been developed in conjunction with other sources of information required for customs (electronic payments, banks, inter-agency portal for statistics, public registers of population and vehicles, etc.)

19 SW completed? How to use ASYCUDA? License module Risk management module Single Window portal Smooth data exchange between agencies and across borders Contacts with other projects (port community system in Odessa)

Licence module Inform respectively Applicant / FEA Participant No Relevant licensing authority Application

License application in electronic format Yes Licensing Customs (1) Apply for a license electronically via the

license application (effectiveness) application for a license in XML enter the scanned documents in the

deleting submitted application License order (2) Licensing process/ Officials: evaluation of a license

application o authorize issuance of a license, if all conditions are met o Issue a unique document number in

20 Licence module Inform respectively Applicant / FEA Participant No Relevant licensing authority Application processing Application approved? License application in electronic format Yes Licensing Customs (1) Apply for a license electronically via the website - "online form" enter the data in electronic form complete application for a license access to previous license application (effectiveness) application for a license in XML enter the scanned documents in the application verify application with electronic signature correction or amendment of the application submitted deleting submitted application License order (2) Licensing process/ Officials: evaluation of a license application o check if all criteria are met o refuse the application (specifying the reasons) o re-evaluate the application o authorize issuance of a license, if all conditions are met o Issue a unique document number in numerical form or in the form of a bar code (3) Complete the licensing process Automatic data verification in the SAD Automatic recognition of imported goods / amounts from licenses using barcodes scanning License procedure completed

21 How to use ASYCUDA? Risk management module Single Window portal

22 Risk management and efficient control Sanitary Inspection Phytosanitary Iinspection Customs Border Police Regular meetings with neighbors Submission of data / electronic Preliminary forms prior information to arrival Risk analysis Selectivity Methodology Methodology Lists of legitimate trade Authorized Economic participants Operators Other tools Risk Management Far more efficient control

23 Why a master plan? General project document determining SW development Detailed explanation of how to plan, create, develop and maintain SW Description of problems and possible solutions "Living document"

24 Master plan 1 1. Inquiry / consultations with business 2. Establishment of an interagency management team 3. Development of the original concept 4. Decision on the feasibility of implementation 5. Analysis of business processes and participants 6. Decision on the coverage of SW 7. Identifying sources of funding 8. Selection of a lead agency / implementing agency 9. Creation of a task force of technical experts 10. Analysis of legal issues (+recommendations) 11. Business Process Analysis 12. Drafting a feasibility study and a work plan

25 Master plan Data flow diagram (B2G, G2G, G2B) 14. Standardization and harmonization of data 15. Data model 16. Setting up technical infrastructure 17. Reach an agreement on services available and the interactions between agencies 18. Project administration and long-term strategy 19. Configuration control plan 20. Risk Management Plan 21. Project implementation and transition plan 22. Training Plan (very important) 23. Communication and promotion strategy

26 Clearing goods at the port Data endorsement by Physical control by Customs Customs Submission of data B2G Data in various documents Border Police Sanitary inspection Анализ рисков Border Police Sanitary inspection G2B Phytosanitary inspection Others Phytosanitary inspection Others Release of goods

Stamps the hard copy no IMPORT Order hard copy Marine agent Endorses order Preliminary upload Preliminary upload Forwarder Enters data into UIS Customs official yes Endorses order no upload order

27 Stamps the hard copy no IMPORT Order hard copy Marine agent Endorses order Preliminary upload Preliminary upload Forwarder Enters data into UIS Customs official yes Endorses order no upload order bill of lading Stevedoring company yes SPS Invoice Port Authority State Customs Service official of the State Border Service Endorses order yes no Forwarder Customs official Addition to order Decides on form of control Ways of data exchange with other control bodies? X-ray machines Weighing Inspection etc. Issuance of electronic pass and port entry Registration group transit cargo terminal Registration group of stevedore for receiving debit slip Entering the territory bypassing loading zone. Leaving terminal Customs official Further Customs Procedures Enters into UIS details of the documents based on which goods have passed customs clearance Enters the results of control into UIS The results of some forms of control are entered automatically official of the State Border Service Exportation of goods outside the port

28 International tools ECE recommendation No.33 on Establishing a Single Window ECE recommendation No.34 on Data Harmonization ECE recommendation No.35 on Creating enabling legal environment for SW UNECE Standards for Data Exchange WCO standards: Data Model and Framework of Security Standards ISO Information Exchange Standards Standards of sectorial organizations: WCO, IATA, FIATA, IMO, etc.+ Guides on Business Process Analysis, Data Harmonization, SW Project Management

and time of execution of physical intervention *- terms used in

29 A simplified flow chart of shipments going through cross-border barriers Basic segment of information for decision making Place and time of execution of physical intervention *- terms used in the understanding of UN / ECE Recommendation No. 18: Facilitation Measures

30 Virtual border: removing controls from the border (European Union, WCO) Previous concept Physical border Formalities Possible checks Flow of goods Post Clearance Clearance Audit or audit New concept Flows of goods Information prior to arrival of cargo High risk Low risk Formalities Possible checks Possible random checks Flow of goods Flow of goods Possibility of post clearance audit smooth Flows of goods flow of goods Authorized economic operators

31 Cargo Consignor or exporter Consignee or importer Regulatory bodies Forwarder or 3PL Cargo Port Cargo Shipper, exporter, consignee, forwarder

32 Certificates, permits Customs data Rail data Road transport data IMO/FAL data

33 IMO Guidance on Electronic Documents: Freight Manifest

34 Rec. 16: UN/LOCOD E Rec. 3: ISO country code Rec. 16: UN/LOCOD E Rec. 3: ISO country code Rec. 20: Units

35 Finding out matching data elements of CIM / SMGS, Mapping to the WCO Data Model. Results of the preliminary analysis (S.P. Sahu) 1. Preliminary work of S.P. Sahu requires detailed further study. It is possible to bring the CIM / SMGS in line with international standards, there have been several attempts at making an e-consignment note ( There are several EDIFACT adaptations of the railway consignment note, making mapping difficult. 2. A preliminary examination of data requirements and documentation of CIM/ SGMS suggests that it is based entirely on paper processes. 3. Boxes cannot be considered as data elements. These could be a combination of data elements and placeholders for other documentation and references. 4. There are no standard descriptions of the business process at stuffing, loading, transshipment and intermediate locations. 5. It is not clear if and how Customs make use of these documents. In case Customs use these documents, what is the Customs procedure involved? In the EU, they are accepted by Customs, but the data is not part of the system. 6. The document appears to be used for both transport and regulatory purposes. It would be ideal to separate both lines and keep those pieces of information consistent with each other. 7. Complete digitization of this process may require a proper documentation of the business processes, data exchange contexts, exploration of data standards and code lists. 8. WCO Data Model can cover regulatory reporting. Freight aspects reflected in the consignment note, even though partially covered by the data model may not be adequate.

36 Rec. 34: Why harmonize data? To simplify and automate data exchange Eliminate repeated and unnecessary information Build a Single Window Create an electronic data exchange Harmonization steps: Capture - Identifying and inventorying the data requirements of all agencies Define - The meaning: what info is conveyed, semantics, legal authority Analyze - Comparing similar names and definitions Reconcile - Agreement to use one name, one definition, one code Create data structure for electronic documents (XML) The new Guide of UNECE and ESCAP on data harmonization.

37 Why data harmonization? Different date formats: DD/MM/YY 27/09/12 DD/MM/YY (Muslim calendar) 20/01/55 DD-MM-YYYY MM/DD/YY 09/27/12 MM-DD-YYYY YYMMDD YYYYMMDD YYYY-MM-DD DD MONTH YYYY 27 SEPTEMBER 2012 MONTH DD, YYYY SEPTEMBER 27, 2012 DD MONTH YYYY 27 September 2012 MONTH DD, YYYY September 27, 2012 Mismatch 1:1

38 Data Harmonization of 3 documents 7 IMO FAL forms SAD CMR 142 data elements 110 data elements 47 data elements Collect Set of 299 data elements = 299 data elements required

39 Data Harmonization of 3 documents 7 IMO FAL forms harmonized 64 data elements Transit declaration CMR 16 data elements data elements-9 Standardization and Data Harmonization Standardized Data Set of the 9 documents 119 Data Elements Standardization and Harmonization can reduce the required data elements from 299 to 119 required data elements

40 Why align data with international standards? 8 cities with the name Odessa in the world : In the USA: US ODF (FL) in Canada: US ODG (MO) CA ODE (ON) US ODS (NY) US OSD (TX) in Ukraine: US ZGY (DE) UA ODS US ZOA (NE) just try to send a container, using electronic data submission, to Odessa, Canada, without UN/LOCODE

41 PCS payback estimate Containers for Containers for Empty containers export import Odessa Total sum Ilyichevsk Two ports х 0, х 2, х 0,40 Sum Є Є Є = Є A simple payback model for local Single Window in the ports of Odessa region. Base: container flows through the ports of Odessa region. Pricing example: the price for PCS services provided at the port of Felixstowe (GB) for containers: 1.8 ( 2.2) for import and 0.8 ( 0.98 EUR) for export for empty container handling => Provided the PCS for container shipping is created, the ports of Odessa and Ilyichevsk can earn 1,053,837 per year. Existing systems cost between 2 mn (Barcelona) and 100 mn (Japan) according to EAPCS. If the PCS project in Odessa region costs e.g. 4,000,000, the system may be repaid within 4 years or less. Investors: potential founders (subscription), port, state, credit...

42 Recommendations for TRACECA Focus on a smooth cross-border data exchange - regional cooperation Introduce trade facilitation in the national development strategy In case Single Window projects are adopted implementation step-by-step, agency-by-agency, document-bydocument, in accordance with international standards; create an interagency and public-private cooperation mechanism to support the establishment of the system (working groups); adopt a national master plan including tasks for all parties; consistency: networking, data harmonization, IT system building For Moldova join the Odessa project!

43 THANK YOU! MARIO APOSTOLOV Regional Adviser, UNECE, Trade Division Palais des Nations, Room 431 CH-1211 Geneva 10, Switzerland tel.: fax: &

Trade Facilitation, Single Window and Data Harmonization: Conceptual framework and standards

Second Regional Conference on Trade Facilitation, the Single Window and Data Harmonization Tbilisi, 13-14 June 2012 Trade Facilitation, Single Window and Data Harmonization: Conceptual framework and standards