Overview of tangible and intangible gains from Cross-border paperless trade implementation. Rama HA (Sung Heun) Korea Trade Network

Size: px

Start display at page:

Download "Overview of tangible and intangible gains from Cross-border paperless trade implementation. Rama HA (Sung Heun) Korea Trade Network"

Baldric Tucker
6 years ago
Views:

1 Overview of tangible and intangible gains from Cross-border paperless trade implementation Rama HA (Sung Heun) Korea Trade Network

2 Benefits of Paperless Trade Analysis of CBPT cases Implications to Agreement Conclusion 1

3 1. Gains from Paperless Trade I. Benefits of Paperless Trade Gains of Paperless Trade Common Benefits - (Time) Re-keying times - (Quality) Data error rate - (Cost) Savings on Manpower - (Cost) Savings of documents printed - (Quality) Service quality improvement - (Quality) Increased customer satisfaction SME - (Cost) The proportion of customs clearance outsourcing - (Cost) Changes in customs fees - (Cost) Limit of loans against Cargo Manifest - (Cost) Limit of loans against Bill of Lading - (Time) Number of days for export rebates - (Time) Change in arrival time of the goods at destination - (Cost) Cash flow situation in a firm 2

4 1. Gains from Paperless Trade I. Benefits of Paperless Trade Gains of Paperless Trade Benefits to Large Enterprises - (Cost) The number of staff engaged in customs clearance - (Cost) The number of staff engaged in accounts settlement - (Cost) Business overhead cost - (Time) Lead time from supplier s acceptance of an order to purchasers receipt of the goods - (Time) Key products production preparation cycle - (Time) Import and export processing cycle Benefits to Banks and Insurances - (Cost) The number of employees handling letters of credit (L/C) - (Compliance) The number of frauds - (Time) Time needed to arrange for insurance - (Time) Time needed to prepare for claim settlement 3

5 1. Gains from Paperless Trade I. Benefits of Paperless Trade Gains of Paperless Trade Benefits to Government Authorities - (Quality) Service quality improvement - (Quality) Increased customer satisfaction - (Quality) Reduction in customer request for improved service - (Quality) Reduction of inferior service - (Quality) Complaint Rate - (Convenience) The Visualization proportion of cargo clearance - (Quality) The proportion of the goods to achieve a pre-clearance - (Time) Cargo clearance time - (Time) Time needed for the Customs to check documents - (Time) Time needed for the inspection department to issue certificates - (Time) Approval time of Commerce Department and other departments - (Compliance) The number of Fraud - (Compliance) Compliance rate - (Compliance) Risk Management 4

6 1. Electronic Visa Information System Electronic Visa Information System (ELVIS) Visa system is used to prevent illegal transshipments, and quota fraud to ensure that both government of exporting country and the USA count merchant and charge quotas in the same way so that over-shipment, incorrect quota and embargoes can be avoided In early stage of ELVIS, numbers of country had participated to the ELVIS program: Bangladesh, Cambodia, China, Hong Kong, Indonesia, Republic of Korea, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, and Thailand. However currently only Haiti and Singapore are applicable for ELVIS due to the release of textile quantity limit to U.S. 5

7 1. Electronic Visa Information System Authorized Agency 1 Application for Visa Issue US Visa(APPUSV) Customs Trade Firms 2 Advice of Visa Issue USA (USVISA) Authorized Service Provider 6

8 1. Electronic Visa Information System Benefits of ELVIS Security - ELVIS data move electronically between government systems. Safeguards are in place to protect the integrity and confidentiality of the information. Reduced fraud - There is less opportunity for counterfeit paper documents to be used because the information provided by the importer/broker must match the information transmitted by the foreign government. Paper documents are more susceptible to tampering. Improved compliance - Data discrepancies are decreased because the importer/broker's entry data must match the foreign government's export information. Both governments maintain control over the transmissions and data Improved monitoring - Statistical reporting and tracking of certificates/licenses is enhanced. ELVIS allow the participating governments to monitor document utilization via electronic reports they can request as frequently as necessary. Timeless processing - ELVIS participants are authorized to transmit an electronic request or register a document at any time, seven days a week, 24 hours a day. 7

9 2. Single Customs Territory What is Single Customs Territory (SCT)? A Single Customs Territory is described as a stage towards full attainment of the Customs Union which is achievable by the removal of restrictive regulations and /or minimization internal border controls on goods moving between the Partner States with ultimate realization of free circulation of goods. The EAC SCT covers Partner States namely Burundi, Kenya, Rwanda, Tanzania and Uganda. Objectives Reduce the cost of doing business Enhance application of cross boarder Information Communication Technology (ICT) and quality data collection at the regional level. Enhance capacity and improve coordination of the private and public sector. Enhance compliance to regional standards and instruments. 8

10 2. Single Customs Territory Why SCT was required? - Application of law; difference in application of laws and other instrument - Duplicated Procedures: Multiple Customs declaration at Internal borders - Security Bonds: Multiple Security Bond regimes - Varying valuation: Application of varying valuation approaches - Enforcement: Weak Enforcement Mechanisms - Different and complex procedures and requirements; - Restricted flow of cargo - Congestion at the ports and border stations - Non Tariff Barrier: Multiple road blocks along the transit corridor 9

11 2. Single Customs Territory 10

12 2. Single Customs Territory Legal framework? The EAC SCT Model is guided by the fundamental operational Principles of the EAC under Articles 6 and 7 of the Treaty Destination Model? This requires that any Cargo entering the Region must be cleared at the First point of Entry and Taxes paid at Destination before release. Cargo destined to outside the Region is cleared under the Transit Regime. For Local Exports, declaration is made in the importing Country before release by the Exporting Country. Release of both INTER & INTRA is done by the Revenue Authorities Customs Officers of the Destination Country who are now based at the Ports of Entry and Major Cities e.g. Mombasa, Nairobi, Nakuru & Kisumu. 11

13 2. Single Customs Territory Benefits Reduced cost of doing business by eliminating duplication of processes. Reduced administrative costs and regulatory requirements. Realization of economies of scale and optimal use of resources in clearance of goods in EAC. Enhanced attraction of foreign, domestic and cross border investment. Enhanced relationship between the private and public sector. Creation of a mechanism for prevention of smuggling at a regional level. Reduced risks associated with non-compliance on the transit of goods. Creation of an efficient mechanism of revenue management. Enhanced application of information technology (IT) and data collection at the regional level Increased business turn-around times due to the elimination of duplicated processes along the corridors. Support of the EAC Common Market and creation of an Internal Single Market Elimination of Non Tariff Barriers (NTB) to enhance seamless flow of goods within the EAC region. 12

14 2. Single Customs Territory Benefits An analysis in EAC region has shown that the SCT has reduced the Cost of doing business by about 50% since implementation and the time taken to move cargo across the region from 18 days to 8 days from Mombasa to Kigali. 2009/ Dwell Time in Port 7 3 Cargo Transit time 11 5 Total Ocean Freight 1,700 1,900 Trucking Charge 6,050 5,050 Bribes Subtotal (cash cost) 9,064 7,798 Opportunity Cost for Truck 5,824 4,732 Extra Inventory for Cargo 3,280 2,460 Subtotal (Hidden Cost) 9,104 7,192 Total ,990 13

15 3. Cross-border e-c/o Why electronic Certificate of Origin? Path finder project - APEC sets electronic C/O as a Path Finder project of Electronic Commerce Steering Group and Paperless Trade Subgroup Cumbersome, time consuming and expensive paperwork process for the certification One of the most common border-crossing trade document 14

16 3. Cross-border e-c/o E-C/O Process KCCI ECO Enquiry on KCCI Website With ID and Password Customs Exporter CO APP ECO (for view) Inv, P/L CO APPORG (specify ECO Number) KTNET Repository ECO CERTIF Inv, P/L, Attach ECO from repository Trade-Van Repository Import Declaration ECO confirmed by importer Inv, P/L, ECO Sign to confirm ECO Assign Customs Broker Generate Import Declaration Data Importer Import Declaration Customs Broker Korea Taiwan, Province of China 15

17 3. Cross-border e-c/o Benefits to Exporters and Importers Exporter - (Time and Cost) Save time and costs (courier express US$23) in applying and sending over paper CO - (Time and Cost) Pass over stamping on the CO from Taipei Trade Representative Office in Korea save time (in average 3 days) and costs (US$17 per stamp, transportation cost US$20-40) - (Security) Transmit cross border documents in a secure online environment - (Quality) Better service to their buyers Importer - (Time) Speed up customs clearance process - (Cost) Expedite cargo pick up saving warehouse cost - (Security) Guarantee of authentic CO Government - (Compliance) Guarantee the integrity and authenticity of the cross border documents, reducing possibility of frauds - (Convenience) Reduce effort in paper CO verification - (Time and Quality) Speed up customs clearance process and better service to trader community 16

Exporter 1 CO Application Issuing Body (or Customs) 3 CO Delivery By Post 2

18 3. Cross-border e-c/o GACC China Customs has implemented projects for the exchange of Preferential CO data with Hong Kong, Macau and Taiwan(China) Exporter 1 CO Application Issuing Body (or Customs) 3 CO Delivery By Post 2 Issuance of CO CO Meta Data exchange Importer 4 Submission of paper CO China Customs 17

19 3. Cross-border e-c/o China s Regime on ROO Administration Formulation of ROO: led by GACC Stake-holders: MOFCOM, AQSIQ, CCPIT, others. Mechanism: Co-ordination Committee on Administration of ROO Certification procedures: AQSIQ, CCPIT Customs procedures: checks on COs or examination on goods: customs origin verification: for imported goods: customs for exported goods: issuing bodies 18

20 3. Cross-border e-c/o Rationale of ECO certification and verification system under CEPA (HK) Issuing bodies Hongkong Trade and Ind. Department Hongkong Electronic Port-China GACC exporter CO importer CO Local Customs Matching of data of CO and ECO 19

21 3. Cross-border e-c/o Benefits of CEPA ECO For business and traders: initiative to compliance fast trade flows less trade and business cost For Customs and other governmental agencies: fast and effective clearance accurately and effectively prevent risk of origin frauds close link and interaction between Customs and related agencies and bodies. 20

4. CBPT with Global SCM Benefits of cross-border paperless Trade with global SCM SAMSUNG ELECTRONICS 4Mil.$ 17B$ Purchase Amount per PAX 10K 22K Handling Doc.

22 4. CBPT with Global SCM Benefits of cross-border paperless Trade with global SCM SAMSUNG ELECTRONICS 4Mil.$ 17B$ Purchase Amount per PAX 10K 22K Handling Doc. Per PAX Employees in Customs Clearance Department 12weeks Short Purchase LT 4weeks 25days 5days 53steps 17steps 620boxes 30boxes Trade Processing Time Usage of Paper

23 5. Gains from CBPT Analysis of CBPT benefits Analysis of 47 CBPT cases - Assuming the primary objectives (expected) gains are achieved - Selection of elements of direct Benefits Structural elements of Benefits Time Cost Convenience Quality Security Compliance 22

24 5. Gains from CBPT Composition diagram of major benefits of Cross-border Paperless Trade Project By Trade Procedures Time Cost Convenience Quality Security Compliance Commercial Transaction (4 cases) Transportation & Related Services (18 cases) Official Control (17 cases) 100% 75% 50% 50% 0% 0% 82% 59% 47% 0% 0% 76% 61% 44% 56% 11% 22% 56% Payment (8 cases) 88% 88% 25% 0% 75% 0% 23

25 5. Gains from CBPT Composition diagram of major benefits of Cross-border Paperless Trade Project By Transaction Models Time Cost Convenience Quality Security Compliance B2B (17 cases) 94% 76% 52% 11% 35% 5% B2G/B2G2G (20 cases) 85% 75% 40% 5% 0% 80% G2G (11 cases) 45% 36% 18% 9% 0% 90% 24

5. Gains from CBPT Summary of tangible CBPT benefits Direct Time saving is the most common benefit of CBPT Commercial transaction puts service Quality improvement higher than other process Payment

26 5. Gains from CBPT Summary of tangible CBPT benefits Direct Time saving is the most common benefit of CBPT Commercial transaction puts service Quality improvement higher than other process Payment process emphasis on enhanced Security Transportation and official control processes emphasis on higher Compliance to government regulations CB-G2G transaction focuses mostly on higher Compliance while CB-B2G transaction brings direct Time and Cost savings as well Summary of intangible CBPT benefits Enhancing regional economic integration using CBPT Mutual recognition and exchange of electronic messages can establish trusted environment for trade CBPT leads to a close cooperation between public and private sector 25

27 1. CBPT and general principles III. Implications to Agreement CBPT and general principles of the agreement Technology neutrality Legal framework of CBPT project shall not bind itself to a specific technology Functional equivalence Life cycle (Creation, transmit, storage and disuse)of electronic documents shall be the same as paper document Replacement of paper submission by electronic means Promotion of interoperability; CB-B2G and CB-G2G transactions require interoperability among Paperless Trade systems of different government and private sectors 26

28 1. CBPT and general principles III. Implications to Agreement CBPT and general principles of the agreement Improved trade facilitation and regulatory compliance CB-B2G/G2G aims higher compliance CB-B2G/G2G can streamline the process Non-discrimination of the use of electronic communications Acceptance of electronic means in CB-B2G/G2G Replacement of paper submission by electronic means Cooperation between the public and private sectors CB-G2G does not require intervention from private sector However, CB-B2G requires close cooperation btw them Improving transboundary trust environment Successful CBPT projects are implemented upon mutual tr ust (confidence in authenticity) in the exchange of electro nic documents and data 27

IV. Conclusion Promotion of CBPT could bring a lot of benefits to trade community of ESCAP region, with huge Time saving, direct/indirect Cost saving, enhanced Convenience, improving service Quality

29 IV. Conclusion Promotion of CBPT could bring a lot of benefits to trade community of ESCAP region, with huge Time saving, direct/indirect Cost saving, enhanced Convenience, improving service Quality and level of Security and higher Compliance to regulations, all resulting in trade facilitation and trusted environment in the region. In this regard, the Framework Agreement for the facilitation of CBPT could be a key to a strong economic integration for ESCAP member states 28

30 29

Pan Asian e-commerce Alliance

A Model For CAREC Regional SW Platform? CAREC Single Window Implementation Seminar 6-8 July 2010 WCO Training Center, Baku, Azerbaijan Pan Asian e-commerce Alliance Agenda About PAA About ASEAN Single