UNNExT Workshop on

Electronic Exchange of SPS Certificates for Better

Trade Control and Facilitation

21-22 October 2015

Wuhan, China

STREAMLINING AND AUTOMATING PROCEDURES FOR AGRIFOOD TRADE

Francis Lopez President, InterCommerce UNNExT Expert

Electronic Exchange of SPS Certificates for Better Trade Control and Facilitation

21-22 October 2015, Wuhan, China

Addressing Key Issues in Agri-Food Trade

• Increasing population and income result to increase

demand for food

• Gains in trade agreements being negated by

regulations on food security, SPS and non-tariff

barriers

• Food loss and waste in cross border, agrifood trade

“ .. Promote an open and rules-based trading system that allows reliable movement of

agriculture and food products, support efficient distribution systems throughout the

supply chain.” (APEC Declaration on Food Security)

Typical AgriFood Supply Chain*

* Information Management in AgriFood Chain: Towards an Integrated Paperless Framework for AgriFood Trade Facilitation

Collaboration in Trade • Identifiers: AEOs, Product

Codes • Compliance to import

requirements • Visibility across the Supply

Chain

Case Studies • India GrapeNet • Malaysia Food and

Traceability • Vietnam TraceVerified for

Fish Exports • New Zealand eCert for Meat

Products

Case Studies • US ITDS –GS1 • China eCert, GPS and RFID Transport

• Air, Sea and Land

Case Studies

• Export

– India GrapeNet

– Malaysia Food and Traceability

– Vietnam TraceVerified for Fish Exports

– New Zealand eCert for Meat Products

• Import

– China Tianjin eCert, GPS-RFID

– US ITDS

– Philippines Trade System

• Key Success Factors

– Identification of source and products

– Specific testing procedures – Export-Import collaboration to ensure

Certification for compliance to import

regulatory requirements – Accessibility of data for transparency,

monitoring and reports – Government support, possibly with

funding, for sustainability – Tangible benefits to government and

the private sector – Cost effective technical solution

Challenges in Paper-based Processes

• Hardcopy documents

- Daily volume of documents submitted

- Accuracy, consistency of information

• Manual intervention in the review, processing and

approval

- Clerical errors in review

- Human intervention in the approval processes

- Data re-entry to generate reports

• Transparency

- Data visibility, documents in filing cabinets

- Accountability

- Limited data analysis

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1. Export Procedures

– Export Declaration

– Certifications in Compliance to WTO SPS Agreement, availability to import authorities

– Certificate of Origin

– Manufacturer/establishment Registration, GAP, etc.

2. Cross Border Transportation

– Transport documents: AWB/BL/Waybill

– Cargo handling information, monitoring

3. Imports Procedures

– Import permit issued by regulatory agencies

– Verification on compliance to import and quarantine regulatory requirements

– Quarantine, physical inspection

– Import declaration and Custom Clearance

Export

Cross Border/

Transport

Import

Food Processors, Consumers

Producers, Traders

Focus Areas in Trade Facilitation

1. Producer, Manufacturer, Trader

– Identification of the source: product, producer, and area

– Certification particularly on the quality of produce

2. Export Trade Regulatory Organizations

– Compliance to SPS Certification and import regulatory

requirements

– Electronic SPS Certificate accessible to Import Quarantine

Agency

3. Import Trade Regulatory Organizations

– Import permits to specify requirements

– Advanced verification and acceptance of Certifications

– Risk Management to reduce quarantine, physical inspection

– Compliance to Customs requirements

Interventions for Trade Facilitation

SPS Certificate

• Sanitary and Phytosanitary Certificate

- WTO SPS Agreement

- International Plant Protection Council (IPPC) and the

International Plant Sanitary Measures No.12 (IPSM)

- CODEX Alimentarius Commission/OIE

• Issuance of SPS Certificate

- Harmonise SPS measures, based on international standards,

guidelines and recommendations

- Safeguard international trade of plants, animals and fisheries

and products thereof

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SPS Certificate Workflow

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Manual SPS Certificate

• Application and issuance

- Submission of application, samples support documents

- Conduct of inspection of production facilities, and laboratory

tests on products (if applicable)

- Preparation and approval of SPS Certificate

- Issuance to exporter

• Transmission of SPS Certificate

- Transmission of SPS Certificate by exporter to importer (thru

courier)

• Utilization of SPS Certificate

- Verification of the SPS Certificate and compliance to

quarantine requirements

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e-SPS Certification

• Definition

- A secure exchange of SPS / eCert Messages from Issuing

Authority (Export) to Quarantine Authority/National Plant

Protection Organisation -NPPO (Import)

• Objectives

- Ensure compliance to health, sanitary requirements of

exporting and importing country

- Facilitate quarantine compliance and control fraud

- Trade facilitation, cross border efficiencies with advanced

information, reusable data

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e-SPS Features

• Government-to-Government (G2G) Exchange

• Equivalent to paper SPS Certificate

• Prior Notice - available prior to arrival of goods

• Initiate pre-clearance processes including risk

management

• Verification of paper SPS Certificate

• Reusable SPS data: traders, product identifier,

quantity/volume

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• Adopt electronic message standards for paper documents, e.g. UNCEFACT e-Cert for SPS (Health) Certificate, IPPC e-Phyto for Phyto Certificate

- Compliance of SPS application data to data element

requirements of message specifications

- Re-use of application data in the issuance of electronic SPS

Certificate

• Arrangement on the Exchange of SPS Certificate

- Undertaking on the issuance of the e-SPS

- Use of e-SPS to ensure SPS Certificate, to facilitate quarantine

clearance at border

- Mode of exchange and data communication protocols (pull,

push, exchange)

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Automating SPS Certificate

E-SPS Workflow

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E-SPS Initiatives

• IPPC IPSM No 12: ePhyto Certificate Hub Model

• AU DAFF e-CERT: Transmission of UNCEFACT

e-Cert

• US ITDS GS1: Use of Identifiers on Products and

Traders

• PAA e-SPS: Provisioning of Workflow

Infrastructure

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IPPC ISPM No.12 : e-Phyto

• Definition

- It is the electronic transmission of phytosanitary certificate

information (electronic equivalent of a paper phytosanitary

certificate), containing the same information and giving the

same guarantee.

• Key Elements

- Message format

- Harmonisation of message contents (as prescribed in

ISPM12)

- Secure transmission

- Authenticity of the message

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IPPC: International Plant Protection Convention

ISPM: International Standards for Phytosanitary Measures

IPPS ISPM No 12 ePhyto

• Electronic Certificate may be issued where accepted by

the National Plant Protection Office (NPPO) of the

importing country

• Specific required provisions - The mode of issuance, transmission and level of security is acceptable to the

NPPO of the importing country

- Information provided is consistent with the IPPC Model Phytosanitary

Certificates

- The purpose of the phytosanitary certification under the IPPC is realized

- The identity of the issuing NPPO can be adequately established and

authenticated

• Available to the relevant NPPO upon consignment

arrival

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Agreed Principles and Recommendations for the e-Phyto Exchange

1. Agreement on definition of e-Phyto Certification

2. All elements for e-Phyto Certification exchange

mechanism will be derived from IPSM 12

3. Universally accepted standards for secure

Certificate exchange, message format and

implementation of procedures will be used

4. UN/CEFACT Schema (data elements, core

components) must be reviewed to ensure

consistency with IPSM 12 requirements, and a user

guide developed to include an ‘IPSM12 Overlay

for the UN/CEFACT Schema’

19 . . 9 Points Summary on Key Agreements during the Plenary of the 3-day Workshop

Agreed Principles and Recommendations for the e-Phyto Exchange

5. During transition periods in implementation, current

hard-copy practices would still apply

6. Rely on IT experts to provide advise on methods for

flexible and secure electronic transfer

7. Initiate a multilateral standardization approach rather

than a bilateral approach with respect to country-to-

country negotiations for exchange

8. Engage developing countries through regional

cooperation and pilot projects and use IPPC for

outreach activities, and

9. Develop simple-to-understand communication pieces

such as Background Paper and “Myth-busting” Question

and Answers 20

Australia DAFF e-Cert

• E-Cert Website (https://apps.daff.gov.au/ecert/default/Welcome.aspx)

- DA Biosecurity Internet application for electronic certification of

traded food and agricultural commodities. This application

currently provides electronic certification for Australian exports

of Meat, Skins, Fish, Dairy, Horticulture, Grains, Wool, Eggs and

Inedible Meat

- Online search/view of Export/SPS/Health Certificates

- Allows updates on Certificate status: Accepted, Detained or

Request for Replacement

- Allows download of Certificates in XML format

• Alternative Access Mode to E-Cert Data

- Pull data from AQIS via interaction with SOAP interface

- Push data to Import/Quarantine Authority via SMTP and digital

certificates

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Department of Agriculture e-Cert

AU DA

SPS Certificate

Import Quarantine

Agency

Online SPS Verification

Download SPS (Pull)

Transmit e-SPS (Push)

3 MODES OF E-CERT EXCHANGE

AU-PH e-Cert Exchange

AU DA

E-DOC SPS Certificate

PH Bureau of Animal Industry

e-SPS Certificate With Import Permit Reference Number

D A Trade System

Exporter Importer

Import Clearance

SPS Certificate

PH to Facilitate Quarantine Clearance: e-SPS to have Import Clearance RefNo, transmitted upon approval, auto-validation vs Import Clearance prior to arrival of goods

US ITDS GS1 Pilot E-Cert in 2010

• Toys, Cut flowers, Meat and Poultry

• Global eCommerce Product Catalog

- Granularity of product identification

- Product visibility across borders

- Consumer security

- Cost savings

• Compliance to unique country-by-country,

product-by-product requirements

• Enhanced Risk Management

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Use of GS1 Standards in SCM

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GS1 Standards

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• Global Location

Number (GLN)

• Global Trade

Identification Number

(GTIN)

• Global Data

Synchonization

Network (GDSN)

GS1-128 Bar Code

US ITDS GSW Pilot E-Cert Findings

• 100% of the 21 static characteristics assigned to

identify and classify meat and poultry products

could be downloaded from a GS1 GDSN-

compliant catalog

• No information technology or security obstacles,

enable re-use of supplier published product

information, with complex product

characterisation

• Improved data accuracy and efficiencies (i.e.

reduce product characterisation errors)

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APEC GDS Initiative

• The Global Data Standards (GDS) initiative has been driven by the APEC Business Advisory Committee since 2012

• Proposing that Governments leverage business data and systems such as barcoding and data sharing platforms in cross – border control and supply chains for improved transparency and better risk management

• Result could be better product visibility and improved efficiencies, faster clearance, less spoilage etc.

• The use of Global Data Standards in APEC supply chains received endorsement in the Leaders’ Declaration and in the Ministers’ Statement in Beijing in November 2014 with official support for pilot projects

Nine pilot project proposed by APEC economies and LSIF, to be executed Q4 2015-Q2 2016

Lead

Economy

Nominated Product /

Reason for Selecting Product

Trade Route

Hong Kong China Wine: high value, origin-sensitive, subject to regulatory

control

Australia→HKC

New Zealand Deer Velvet: high value, easily perishable, origin-sensitive NZ→Korea

New Zealand Seafood: Origin-sensitive, Easily Perishable, Subject to

regulatory Controls, Seafood widely traded in many APEC

Economies, Long supply chain with cross economy export,

import and processing, Includes border authority

NZ→HKC / NZ→China→USA: Two linked seafood

projects proposed: point–to-point export

(New Zealand and HKC), and Multi-economy supply

chain (New Zealand, China, USA).

Australia Boxed meat: Subject to regulatory Controls Australia→USA; Export: Australia (Teys Australia –

supplier, Chalmers Industries – Road Transport,

Hamburg Sud – stevedoring /shipping, Port of Brisbane –

Port Facilities), Australia Customs, Australian Dept of

Agriculture

Russia Furs: high value, origin-sensitive, subject to regulatory

control

China→Russia

Mexico Tequila: High value, Origin-sensitive, Subject to regulatory

control

Mexico→USA

Peru Asparagus: Easily perishable & subject to regulatory

control (Traceability regulatory eg. PTI – Produce

Traceability Initiative for EEUU and Canada

Peru→USA

Peru - HKC

Malaysia Musang King Durian Whole Fruit

/ Processed Fruit: High Value, Easily Perishable, Origin-

sensitive, Subject to regulatory control, Temperature

sensitive

Malaysia→HKC

Malaysia - China

APEC LSIF/

ABAC

Pharmaceuticals: Subject to regulatory Controls USA→HKC/Philippines/Indonesia/Korea/ Singapore

(TBC)

Objectives and Progress

Objectives • Show how GDS and EPCIS (barcodes) can deliver direct benefits for

traders, customs and governments

• Reinforce use of barcoding for missing shipping mark protocol

• Demonstrate how GDS compliments AEO/TTP’s

• Show how to leverage GDS based services including GDSN (GS1net),

Recallnet portal and EDI (Transport Instruction)

Progress

• Pilot participants are collaborating (US Customs/USDA still WIP)

• Completed supply chain events map, data reqt’s and collection points

• Established and tested EPCIS V1.1 platform (GS1HK ezTRACK)

• Reviewing GDSN, EDI and recall requirements

• Working with pilot team and Policy Support Unit (PSU) to finalise KPI’s

• First shipment due late Oct/Nov 2015

Application of Global Data Standards

(GDS) in APEC Economies:

Methodology of the project

A. Identify benefits

• Cost savings: measurable/ static

• Sales boost and customer service factors: dynamic, less easily measured

B. Develop baseline indicators and benchmarks

• Improved planning

• Customer satisfaction

• Efficiency gains

C. Develop survey templates

• Companies in the pilot supply chain

• Stakeholders

D. Estimate costs and benefits

• Error rates

• Timeliness of delivery

• Labour costs

• Inventory costs

• Transport system costs

• Consumer benefits

• Others: product recovery and recall, proof of authenticity

E. Review of existing operations

• Delivery of clean data

• Data security and ICT integration costs for SMEs

• Benefit-cost assessment report

• Policy Recommendation

Pan Asia Alliance e-SPS Initiative

• PAA members are authorized services providers of their respective Customs and other government agencies, to enable electronic transactions

• The PAA provides safe and secure cross border exchange of electronic trade, transport and commercial documents

• PAA e-SPS initiatives aim to facilitate collaborative e-SPS exchange between economies

PAA Collaborative eSPS Exchange Model

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PAA E-SPS Exchange

PAA e-SPS with One SP

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E-SPS Challenges

• Largely manual SPS processes issuance and utilization

• The receipt/access to e-SPS Certificate mainly to

authenticate paper SPS Certificate (control fraud)

• Messaging, connectivity and IT infrastructure issues

• Compliance to import requirements and the rejection

of SPS is not addressed by most e-SPS initiatives

• Legal, policy framework for the use and exchange of

electronic messages in lieu of documents

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Thank you.