Post on 04-Apr-2018
Analysis
on the cross-border trade processes
and reference map for cross-border paperless trade.
HA, Sung Heun (Rama)
Sept. 2015
PO Confirm/
Proforma Invoice
L/C Term?
Agency/Lab/Association
Exporter
Exchange Bank
Forwarder/
Broker
Customs
Sea/Air Carriers
(Terminal)
Customs
Forwarder/
Broker
Exchange Bank
Importer
L/Copening
L/C Arrival Notice
L/CReceive Booking
Booking/Notice
Booking
선적/Export Declaration요청
Shipping Instruction/ Confirm
Yes
Export Declaration/
Approval Notice
Approval of
Declaration
Shipping Instruction
acceptance
-Invoice
-Packing List
Pick up
Export Declaration ReceiveTransportation
Terminal In
2. Terminal-In
Report
3. Gate In Report
1. Shipping Notice
Master B/L Issue
House B/L Issue
House B/L Receive
5. Shipping document
Manifest send
H Manifest
submission
Manifest Filing
PO
Issue
Conformity Certificate
Shipping Notice receive
Apply for Conformity
Agency/Lab
Terminal In Report
Acceptance
Port
-Invoice
-Packing List
-B/L etc
Nego /
Collection
Payment Term?
Departure Report
Application/submission
Departure Report
Approval
Departure Report acceptance
Port / Immigration
T/T
L/C
Shipping
document
No
Manifest
submission
H Manifest receive
4. H Manifest Notice
Shipping
document
Receive
Shipping document Hand over
Import payment Settlement
Collect
Payment Settlement
Settle
ment
SWIFT
Departure Report
Approval
International Supply Chain with Cross-Border Transactions
Documents crossing borders
Agency/Lab/
Association
Exporter
Exchange Bank
Forwarder/
Broker
Customs
Sea/Air Carriers
(Terminal)
Customs
Forwarder
(Broker)
Exchange Bank
Importer
H Manifest
submission
Manifest send
Manifest acceptance
Arrival submission
Arrival
submission
acceptance
Arrival submission/
acceptance
Immigration
Cargo arrival Notice receive
1. Cargo arrival Notice
Unloading/
Terminal-In submission
Unloading submission
acceptance
Import Declaration/
Approval NoticeCargo Arrival
Notice
2. Cargo Arrival
Notice receive Import Declaration
Import Declaration
Approval
Cargo Fee
Settlement
Delivery Order Issue
Terminal-In submission
acceptance
Port
Import Declaration
Receive
Apply for
Conformity
Conformity
Agency/Lab
D/C Receive
Pre-Terminal-Out
submission
사전Warehouse-Out
acceptance
Warehouse-Out
Report
Terminal-Out Report
acceptance
Port
In Report
In Report acceptance
Hand over
Request
Cargo Hand over
Cargo
Warehouse-Out
Report
Warehouse-Out Report
acceptance
Payment Request
Payment Settlement?
End
Payment
Payment Notice
Payment Notice acceptance
SWIFT
International Supply Chain with Cross-Border Transactions
Documents crossing borders (Continue)
Border-crossing activities in 4 major areas of international
trade
ProcessProcessProcessProcess CategoryCategoryCategoryCategory ActionsActionsActionsActions
Buy Commercial transaction sector
(a) Business opportunity finding:
(b) Contract
(c) Order and production monitoring
(d) Other commercial measures including trade documentation
Ship
Transport and
related
services
Forwarding and cargo
handling
Transport
(k) Shipping and cross-border transportation (including issuing Bill of
Lading)
(l) Entry port activity
Insurance (i) Insurance
Official controls
(e) Conformity certifying activity at exporting country
(f) Regulatory compliance activity at exporting country
(m) Conformity certifying activity at importing country
(n) Regulatory compliance activity at importing country
Pay Payment sector (r) Trade settlement
International Supply Chain with Cross-Border Transactions
� Commercial Transactions• Offer, Counter Offer, Proforma Invoice
• Framework contract, contract
• Invoice, Packing List
• (Self) Test Certificate, Manufacturing Certificate
• Cargo Insurance (Insurance Policy) and etc
� Trade financing and settlement• Letter of Credit, Bill of Exchange and etc
� Transportation and related services• Cargo/Vessel Status information
• In-Transit report
• Bill of Lading, Sea Way Bill, Air Way Bill and etc
� Official control measures• Country/Certificate of Origin
• Conformity Certificates such as Fumigation Certificate, Safety/Health Certificate and
National/International Standard Certificate
• Import/Export License/Permit and Quota
• Customs clearance information, Advance Manifest and etc
4 major areas
Border-crossing documents and data in 4 major areas
The cross-function of trade documents
4 major areas of cross-border trade documents and data
� The cross-function of trade
documents implies that
documents used in multiple
areas are more challenging
� In other words, documents
needed only in its own area
could be rather easily
migrated into online process
Trader, Carrier and etc
Message
Message
B2B Trader, Carrier and etc
Customs, PGAs
Message
Message
G2G Customs, PGAs
Recognition of border – crossing B2B data & documents
B2B2G
A challenge for B2B transactions
CategoryRelated trade documents/
information
Cross-border projects, services and agreement
Cases Ownership
Commercial
transactions
- Korea-Japan e-MP project Public
Contract, Order and etc B2B e-Marketplace (i.e. Alibaba) Private
Purchase Order, Forecastin
g, Production status, Ship
Notice
International Supply Chain B2B Transactions
(i.e.. GM, Ford, BMW, Apple and Walmart)Private
Purchase Order, Invoice, P
acking list, Advance Shippi
ng Notice
PAA Secure Cross-Border Transaction service
sPAA (Private)
Trade financing
and settlement
e-L/C(Local L/C)
uTradeHub (Trade financing with L/C) PPP
Bolero e-L/C Private
P/O, Invoice and shipping d
ata
SWIFT TSU & BPO SWIFT (Private)
TradeCard TradeCard (Private)
P/O, Invoice and e-B/LBolero Bolero (Private)
TEDI TEDIANET (Private)
- Paypal, Alipay Private
e-B/L uTradeHub e-Nego PPP
Reference map
Reference map (1) : Commercial transactions and
trade financing & settlement
CategoryRelated trade documents/
information
Cross-border projects, services and agreement
Cases Ownership
Official controls
e-C/O
ICC ECO Task Force ICC (Private)
Korea-Taiwan, China e-C/O PPP
ASEAN ATIGA Form D ASEAN (Public)
China – Hong Kong, China Customs (Public)
China – Taiwan, China Customs (Public)
A pilot project for electronic exchanges of UEMOA Certificates
of Origin (Senegal and Cote d’)PPP
South America
Conformity Certificate
ILAC, APLAC MRA Private
APEC TEL MRA APEC (Public)
OECD MAD OECD (Public)
IECEE MRA IEC (Private)
e-Phyto
e-Phyto exchange (ROK-Netherland, China-Netherland, Keny
a-Netherland)
IPPC & Quarantine agency (P
ublic)
e-Phyto Hub IPPC (Public)
e-Cert e-Cert (Australia, New Zealand, USA and Japan) Quarantine agency (Public)
Entry port
activity
Pre-arrival information EU SEED Italian Customs (Public)
CUSDEC Asian Region Customs EDI project Customs & AFACT (PPP)
Export DeclarationCustoms Data Exchange between Korea - Malaysia and Kore
a-PhilippinesCustoms (Public)
ASEAN Customs Declaratio
n DocumentASW pilot project ASEAN (Public)
20 documents including Airw
ay Bill and ManifestIATA e-Freight IATA (PPP)
Customs information (inc. da
ta from commercial sources) Globally Networked Customs WCO (Public)
Passenger list APIS (Advance Passenger Information system)Customs, immigration and
airlines
Reference map
Reference map (2) : Official controls
CategoryRelated trade documents/
information
Cross-border projects, services and agreement
Cases Ownership
Transit
Manifest EAC RADDEx EAC (Public)
COMESA Customs
Declaration
COMESA Regional Customs Transit Guarantee (RCTG)
systemCOMESA
SADC Customs Declaration SADC Transit System (Transit Data Transfer Module, TDTM) SADC
electronic Transit Declaration The ASEAN Customs Transit System (ACTS) ASEAN (Public)
electronic Transit Declaration e-TIR UNECE (Public)
-UNDA Project on Customs-to Customs (C2C) electronic
information exchange for transitUN (Public)
Transportati
on
20 documents including
Airway Bill and ManifestIATA e-Freight IATA (PPP)
Invoice, Packing List, AWB PAA e-AWB PAA (Private)
Advance Manifest USA AMS, Japan AFR, EU ICS Customs (Public)
e-Airway Bill IATA e-Airway Bill IATA (Private)
AWB, Freight Invoice AIR CCS (Cargo Community System) Private and/or Public
Reference map
Reference map (3) : Transportation measures
Market
penetrationPublic and
Private
Process
changes
No. of message
types
Technical
assistance
Legal
framework
Number of
Project
cases
Low (1) 1.64 2.36 2.42 1.36 1.43 14
Middle (2) 2.00 3.00 1 3.00 2.00 2
High (3) 1.81 2.81 1.57 2.00 2.31 16
• Cross-border paperless trade project to be initiated with limited number of
message types and it shall be incorporated with international development
bodies and legislations of supporting laws.
• Limited number of message types can be interpreted that when planning a
large scale cross-border paperless trade project, phased approach is more
feasible than single unitary project.
Factors affecting the cross-border projects
Evaluation of ‘up and running’ and ‘out of operation’ projects
• Cross-border paperless trade project cases are classified into five (5)
status; (i) Planning, (ii) Developing, (iii) Pilot running, (iv) Up and running,
and (v) Out of operation and evaluation conducted on (iv) and (v)
CB Models
Web access system
Peer to Peer interconnection
system
Single window /Service Provider
interconnection
Central repository /
platform
Cross-border transaction models
Stake
holder
Number
Technical
Assistanc
e
SimplicityProcess
innovation
Legal
Framework
Business
needsReadiness Priority
Commercial e-Contract Low Low High High Middle Middle Low
e-Invoice/
e-P/LLow Low Low High Middle Middle Middle
e-Insurance Low Low High Low High Middle High
Trade
financing
/Settlement
e-L/C Low Low High Middle Middle High High
e-Settlement High Low Low High Middle Middle Low
Transportation
e-Manifest Low Low Middle Low High Low High
e-B/L High Middle Low High Middle Middle Low
e-AWB Middle Low High Low Middle High High
e-SWB Middle Low High Low Middle Middle Middle
Cargo
TrackingHigh High Low Low Middle High Middle
Regulatory
Control
1 NCB*
e-SPS Low High High High High High Middle
e-License /
e-Certificate with
cross-border MRA
Low High High High High Middle High
other e-License /
e-CertificateLow Middle High High High Middle Low
2 NCBs* eCO High Middle Low High High High Middle
Transit Middle High Middle High High High Middle
* 1 NCB: Issuer and receivers are identical control bodies across borders (eg.: Quarantine agency for SPS Certificate)
* 2 NCBs: Issuer and receivers are different control bodies across border (eg: Chamber of Commerce and Customs for C/O)
Cross-border documents/processes and factors
Factors affecting cross-border projects
Summary of SC - Workshop Group 2
Workshop group on Documents and processes in cross-border
paperless trade
The countries highlighted the need for intergovernmental arrangements for the
recognition of electronic trade documents and mutual recognition of the
certification process
Some countries were concerned about the forgery of document, data security
and integrity, and technical solution such as PKI and document repository
system were introduced
Since there is a MRA on the SPS certificate among CIS countries, the pilot
project on electronic SPS exchange can also be pursued
Everybody agreed with the certificate of origin, SPS certificate (health,
phytosanitary and pharmaceutical) and manifest as the top priority document,
and transit documents for landlocked countries
Electronic equivalents should be accepted by Governments in order to fully
realise the benefits of paperless trade environments
Strengthening cooperation with the relevant international body has been a key
success factor
Legal framework plays key role in promoting and expanding paperless trade
services, being a driving force to the project behind it, encouraging early
adopters and lowering threshold for late movers to get on board, through
stability and predictability of the services and lowered potential legal conflict
‘All-in-one’ attempts have not been successful in many case projects; Phased
approach is highly feasible
Process simplification shall go ahead of process automation to maximize the
potential benefit from the cross-border project
Public and private cooperation is critical
Further study on the assessment on readiness of important cross-border
documents exchange and proper exchange model is recommended
Implications
Implications from the Cross border projects
Participation of private sector experts to the Legal and Technical Work Group
under Steering Group will be crucial
(Tech Group) When selecting the top priority target cross-border paperless trade
projects and documents, factors affecting the projects shall be considered� Conformity Certificates under MRA, C/O and SPS are recommended
� Transportation and Transit projects have been most successful cross-border projects
(Tech Group) The readiness and business needs of top priority documents to be
exchanged online among the member states shall be assessed
(Tech Group) Various horizontal technical issues, such as Interconnectivity,
Standard documents, Harmonization of processes and security measures shall
be discussed and prepared
(Legal Group) In parallel with the cross-border transaction of electronic trade
document, legal framework including international protocols as well as domestic
model laws on the recognition of electronic documents shall be prepared� Mutual Recognition Framework (Cross-border)
� Recognition of electronic equivalent (Domestic)
� Level of service and quality
Recommendations for the cross-border paperless trade
pilot models and road map
Recommendations for pilot projects and road map
Figure 1 Web access system
country Bcountry A
Web view system
of country C
Docum
ent
Verification of
document
Data input
Paperless trade
system of
country A
Paperless trade
system of
country B
Paperless trade system
of country C
Figure 2 Peer to Peer
eMessage
eMessage
eMessage
Paperless trade
system of country A
Figure 3 Gateway to Gateway
Paperless trade
system of country B
Paperless trade
system of country C
eMessage
eMessage
eMessage
eMessage
eMessage
eMessage
SP or SW SP or SW
SP or SW
Figure 4 Central Platform/ Repository Model
Authority of country A Authority of country B
Authority of country C
Central Platform /
Repository
eMessage eMessage
eMessage
Country Issuing body e-C/O System NoteAustralia Australian State Chambers of Commerce e-certify /Ozdocs ESCAP
BelgiumFederation of Belgium Chamber of Commerce
and IndustryDigi Chambers
Brazil
Brazilian Confederation of Trade and Business
Associations (CACB)Certisign
National Confederation of IndustryDigital Certification of
Origin (COD)
Canada Canadian Chamber of Commerce Tradecert / eCertify
FranceParis Ile-de-France Regional Chamber of
Commerce and IndustryGEFI ESCAP
Hong Kong Hong Kong General Chamber of Commerce Tradelink System ESCAP
Netherlands The Netherlands Chamber of Commerce DAE Electronic COs ESCAP
New Zealand New Zealand Chambers eCertify ESCAP
Norway Norway Chambers eCertify
Singapore Singapore International Chamber of Commerce TradeXchange ESCAP
Republic of Korea Korea Chamber of Commerce and IndustryKCCI Trade Facilitation
Service CenterESCAP
Switzerland Basel Chamber of Commerce e-Origin
United Kingdom British Chamber of Commerce e-z Cert / Tradecert ESCAP
United States of
AmericaACCE
eCertify ACCE Affinity
ProgramESCAP
e-CoO status in Asia and the Pacific
22
Has your economyimplemented the onlineapplication of CO?
Has your economyimplemented the onlineissuance/certification of CO?
Yes No Don't know Yes No Don't know
China √ √
Hong Kong √ √
Indonesia √ √
Malaysia √ √
Mexico √ √
Peru √ √
Thailand √ √
ThePhilippines
√ √
Vietnam √ √
Survey result on e-CoO (APEC, as of 2012)
23
e-CoO status in Asia and the Pacific
A great deal of private projects have been successfully implemented for
decades as private sector sees values from the automation of international
supply chain management and finding opportunities using cross-border e-
Commerce.
But electronic transactions/records of private sectors are not recognized by
most governments due to various reasons including lack of appropriate
legislation or technical gaps. So most of transactions remain as ‘information
exchange’ level, thus requiring additional traditional paper based
transaction in the supply chain for regulatory procedures.
The law of the market has been strictly applied
Paperless trade in ‘Commercial transactions’
Implications!
Implications!
Legal framework plays important role in the facilitation of trade financing
through paperless platform bringing huge value to traders.
Emerging trend of cross-border e-Commerce are creating new vehicles for
trade settlement shifting paradigm from conventional Letter of Credit based
transactions
‘All commercial settlement transactions in one platform’ initiatives of private
sectors were not very successful even with its seamless transaction model.
Some of the identified factors were immature market, non-interconnectivity
with trade regulatory systems, huge initial cost and unfriendly user
interface.
Paperless trade in ‘Trade financing and settlement’
Process reengineering, harmonization and simplification of regulatory
control procedures are more effective than plain transition into online.
Application process of Conformity Certification for exporter shall be
considered as an extension of integrated process of other trade documents
cross-border exchange such as electronic Certificate of Origin and
Commercial Invoice
Country specific requirements shall be respected
Bilateral approaches are more successful than multilateral one
Paperless trade in ‘Official controls’
Implications!
Most of successful cross-border paperless trade cases of public sectors are
from transit and transportation area. Practical value to private sector or
mandated use of the regulatory system were critical for successful
implementation in this area
By enhancing the Inter-governmental cooperation, the process can be
further streamlined
‘All in one platform’ didn’t work and phased approaches have made
practical step forwards
As two or more countries are involved in the ‘Transit’ projects, coordination
and technical / financial support of international development bodies have
been crucial in successful implementation
Paperless trade in ‘Transportation and related services’
Implications!
How MRA works?
The designated agency of the exporting country accredits or appoints the
conformity assessment institute (testing agency or certification agency) that
can conduct the conformity assessment pursuant to the importing country´s
technical regulations. At this time, it may appoint the accreditation agency that
conducts the conformity assessment agency´s accreditation matters on behalf
of the designated agency. Also, when it gives the importing country the list of
designated accreditation agencies and the designated or accredited conformity
assessment agencies, the importing country decides on the approval after
assessment.
※ MRA aims to facilitate the trade, increase the market accessibility, and
eliminate or reduce the Non-Tariff Barrier (NTB), not to unify Standards or
Technical Regulations.
Regulatory control measures
MRA (Mutual Recognition Agreement)
Manufacturing Export Test Certification Marketing
Exporting Country Importing Country
Manufacturing ExportTest Certification Marketing
Exporting Country Importing Country
Manufacturing ExportTest Certification Marketing
Exporting Country Importing Country
� Before MRA
� After MRA – (1) Recognition of Lab/Test Result
� After MRA – (2) Recognition of Lab/Certification
Regulatory control measures
Ordering Transactions ANSI X.12 EDIFACT
Purchase Order (Ack.) 850 (855) ORDERS (ORDRSP)
Purchase Order Change (Ack.) 860 (865) ORDCHG (ORDRSP)
Order Status Report (Inquiry) 870 (869) ORDREP (ORSSTA)
Materials Management
Transactions
ANSI X.12 EDIFACT
Planning Schedule/Material Release 830 DELFOR
Shipping Schedule 862 DELJIT
Ship Notice 856 DESADV
Financial Transactions ANSI X.12 EDIFACT
Invoice 810 INVOIC
Freight Invoice 859 IFTMCS
Payment Order/Remittance Advice 820 REMADV
Shipping/Receiving Transactions ANSI X.12 EDIFACT
Shipment Information 858 IFTMCS
Receiving Advice 867 RECADV
Typical ISC B2B Documents
Cases of cross-border exchange – B2B ISC
Outside Japan In Japan
Carrier, Shipping Agent and NVOCC in
JAPAN
Carrier, NVOCC
Carrier, NVOCC
NACCS
Service Provider (SP)
Japan
Customs
Dedicated Dedicated
line
EDI
EDI
Web
EDI
Connection between
Japan, not outside Japan.
Connection between NACCS and filer’s own system is established only through servers located in Japan, not outside Japan.
Web application provided by SP
Web Entry
Dedicated
line
Same corporation
Cases of cross-border exchange – Japan AFR
Japan Advance Filing Rules
Network
Plant Quarantine
Integated
Information
System
(PQIIS)
Request Request
Exporting
Country
SOAPSOAPSOAPSOAP
ServerServerServerServer
SOAPSOAPSOAPSOAP
ClientClientClientClient
Request
Importing
Country
Certificate
Mastering
System(CMS)
DB
Response(XML) e-CertCertificates
Information
Response(update result)
ResultSOAPSOAPSOAPSOAP
ServerServerServerServer
SOAPSOAPSOAPSOAP
ClientClientClientClient
Request
(Result Status update)
Certificate data
Inspector(KR)Acknowledge_certificate
accept_certificate
reject_certificate
request_replacement_certificate
find_certificates_by_update_date_and_status
get_signed_official_certificate_xml
NL
* SOAP : Simple Object Access Protocol
Korea – Netherland e-Phyto Certificate Project
Cases of cross-border exchange – e-Phyto
ECO [Korea ► Taiwan province of China]
Exporter
Repository
KTNET
Repository
Trade-Van1CO APP
2ECO (for view)
3Inv, P/L
(specify ECO Number)
3Inv, P/L,
Attach
ECO from
repository
3Inv, P/L, ECO Importer
1CO
APPORG2ECO
CERTIF
KCCI
Customs
6Import Declaration
ECO confirmed by importer
6Import
DeclarationCustoms Broker
4 Sign to confirm ECO
Assign Customs Broker
5 Generate Import
Declaration Data
ECO Enquiry on KCCI Website
With ID and Password
Korea Chinese Taipei
Cases of cross-border exchange - e-C/O