Draft Reference Map for the implementation of the ... Paperless Trade... · Cargo tracking Any...

1

Draft Reference Map

for the implementation of the Framework Agreement

on Facilitation of Cross-border Paperless Trade

in Asia and the Pacific

1. Introduction

The reference map for cross-border paperless trade processes defines processes and documents involved in international trade transactions

requiring cross-border exchange of data and information.

The reference map is intended to be used as a reference in developing pilot projects under the Framework Agreement on Facilitation of Cross-

border Paperless Trade in Asia and the Pacific.

The reference map defines processes under the broader category of buy, ship and pay and then further down under the four categories of the

United Nations Layout Key (UNLK) – namely commercial transaction, transport and related services, official control and payment. Then, the

reference map defines sub-processes and documentation involved in each process as well as for which products/services such process is

executed. For each documentation, a separate map is prepared with relevant information and references that would help design cross-border

data exchange pilot project(s) at the level of specific process or document.

This document is based on the earlier deliberations of the study report.1 And the structure of this draft Reference Map is composed of Four (4)

chapters as below:

1 Analysis on the cross-border trade processes and recommended reference maps

2

1. Introduction

2. Cross-border process and related documents and data

3. Specification on cross-border trade documents and data

4. Cross-border paperless trade project directory

Chapter 2, ‘Cross-border process and related documents and data’ is to provide a big picture of the areas of international process and its

related documents and data that crosses borders during its life cycle. As detailed process and requirements differ by Member States, this

chapter handles mostly well-known and commonly used trade documents and data being exchanged.

Chapter 3, ‘Specification on cross-border trade documents and data’ illustrates the characteristics of border crossing documents and data.

Lastly, chapter 4, ‘Cross-border paperless trade project directory’ showcases several cross-border paperless trade projects and summarized

well known cross-border projects and services by the trade process regardless of its result.

2. Cross-border trade process and related documents and data

2.1 Categorization of cross-border trade process

3

In their recommendation for trade facilitation2, UN/CEFACT identified four (4) trade process categories: (a) Commercial transaction sector, (b)

Payment sector, (c) Transport and related services and (d) Official controls, as being relevant for the establishment of sectoral alignment

guidelines.

A. Commercial transaction sector: Includes documents applied between commercial parties in the production, sale and purchase phases of a transaction;

B. Payment sector: Includes documents related to the requirements of banks to ensure payment;

C. Transport and related services: Includes documents relevant to the physical international transport of goods, including insurance Sub-divided into

C 1 Forwarding and cargo handling (“Intermediary services”)

C 2 Transport

C 3 Insurance

D. Official controls: Includes document relevant to government authorizes to control the international goods flow

Considering the proximity of this document’s object and that of the recommendation, this Reference Map borrowed the above sectoral

classification from the recommendation as a general categorization of trade documents in an international supply chain. However, the

documents in each sector may differ as the purpose of the Reference Map is different with the recommendation. Accordingly, this Reference

Map categorized the areas of cross-border interactions among businesses and governments into four (4) areas:

2 Recommendation No. 1 – United Nations Layout Key for Trade Documents, UNECE

4

i) Commercial transaction sector,

ii) Transport and related services,

iii) Official controls and

iv) Payment sector

under broader category of buy, ship and pay as in the table 1 below:

Table 1 International trade actions by UNLK categorization

Process Category Actions

Buy Commercial transaction sector

(a) Business opportunity finding:

(b) Contract

(c) Order and production monitoring

(d) Other commercial measures including trade documentation3

Ship Transport and related services Forwarding and

cargo handling

(g) In-land transport at exporting country (including booking and collection)

(p) Inland transport at importing country

3 In typical BPAs (Business Process Analysis) using Buy, Ship and Pay model, trade documentation is placed at Ship process. However, in this report,

by accommodating the UNLK categorization, this action goes to Buy process

5

Transport

( j) Loading port activity

(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

(h) Export customs clearance

(m) Conformity certifying activity at importing country

(n) Regulatory compliance activity at importing country

(o) Import customs clearance

Pay Payment sector

(q) Trade financing

(r) Trade settlement

2.2 Trade documents in cross-border trade process

6

2.2.1 Commercial transaction

Cross border paperless projects in commercial transaction sector are led by private sector, but however there has been a lot of projects

initiated by government or led by public and private partnership program.

Table 2 Commercial transaction sector related documents

Category Cross-border process Related trade documents/

information

1. Business Opportunity Finding 1.1. Offer, Counter Offer, Quotation etc.

Commercial

transaction

sector

2. Contract 2.1. Contract, Framework Contract

3. Order and production monitoring 3.1. Delivery Forecasting, Order, Proforma Invoice, Dispatch Advice etc.

4. Other commercial measures including

trade documentation 4.1. Purchase Order, Invoice, Packing List, Bill of Lading Advice etc.

2.2.2 Transport and related services

Air transport industry has been leading most of cross border paperless projects in Transport and related services sector. Its time sensitivity of

airliners and related businesses has made them rely on ICT means compare to mariners.

7

Table 3 Transport and related services sector related documents

Category

Cross-border process Related trade documents/

information Main process Sub-process

Trans-port and

related services

5. Forwarding and cargo handling 5.1. Freight Charge Invoice

6. Transport

Loading port activity

6.1. Shipping Schedule, Bay Plan, Stowage Plan, Hatch

List, Container Loading List

6.2. DGL (Dangerous Goods List)

Shipping and cross-border

transportation

6.3. Master/House Bill of Lading

6.4. AWB (Airway Bill)

6.5. SWB (Seaway Bill)

Entry port activity 6.6. (Advance) Manifest

Transit 6.7. Transit Declaration

6.8. Transit Bond

Cargo tracking 6.9. Cargo status information

7. Insurance 7.1. Insurance Policy

2.2.3 Official regulatory controls

Various cross border paperless projects in official regulatory controls sector are conducted by government agencies for trade facilitation

purpose. An interesting part is that a lot of projects are closely related to transport and related services sector.

8

Table 4 Documents related to official regulatory controls sector

Category

Cross-border process Documents

Main process Sub process

Official

Control

8. Conformity

Certifying

activity at

exporting and

importing

country

Quarantine

8.1. Phyto-Sanitary Certificate

8.2. Fumigation Certificate

8.3. Veterinary Certificate

8.4. BSE/TSE Free Certificate

8.5. Common Veterinary Entry Document

8.6. Sanitary Certificate

8.7. Health Certificate

8.8. Food Certificate

8.9. Organic Certificate

8.10. Certificate of Environmental Radioactivity Level

9

Standards and

quality control

8.11. ISO and other international standards and quality certificates

8.12. National standard and quality certificates

8.13. (Lab) Test Certificate

8.14. Certificate of Analysis

8.15. Certification of Electrical and Electronic Components, Equipment and Product

8.16. Certificate for medical devices

8.17. CPP (Certificate of a Pharmaceutical Product)

8.18. Certificate of Analysis

8.19. MSDS (Material Safety Data Sheet)

8.20. HALAL Certificate

Others 8.21. Certificate of Manufacture

8.22. CITES Certificate

9. Regulatory

compliance

activity at

exporting

country (and

importing

country)

Country of

Origin

9.1. Certificate of Origin

9.2. FTA Certificate of Origin, GSP Certificate of Origin, GSTP Certificate of Origin,

Origin Declaration, Back to Back Certificate of Origin, APTA Certificate of Origin

Quota 9.3. VISA

10

Permit 9.4. Import Permit

Licensing TBC

Crew/Passenger 9.5. Crew/Passenger list

10. Customs

Export and

Import

Clearance

Import

Declaration 10.1. Export Declaration

Risk

Management

AEO 10.2. AEO List (Profile)

2.2.4 Payment

Out of all the sectors, the Payment; trade financing and settlement sector is the most challenging area for cross-border paperless trading as the

actions in the sector requires a lot of documents from other sectors not to mention the sensitivity of monetary transactions.

Table 5 Trade documents related to trade financing and settlement sector

Category Related trade documents/

information

Payment 11. Trade financing and

payment

11.1. Letter of Credit

11.2. Bill of Exchange etc.

11

2.3 Summary of cross-border trade process and documents

As explained in the introduction, each Member States has different business environment and legislation in international trade hence differentiating

the domestic trade process and documents by individual States. Below table 6 summarizes and illustrates general cross-border trade process and

documents. So, this Reference Map shall remain as a reference purpose only and each Member State shall conduct study to identify national level

cross-border documents especially in official control.

Table 6 Summary of cross-border trade processes and documents

Category Processes

Products

/Services Documents Buy/

Ship/

Pay

UNLK Cross-border

process Sub process

Buy Commercial

Transaction

Business Opportunity Finding Any Offer, Counter Offer, brochure

Contract Any Contract, Framework Contract

Order and production monitoring Any Delivery Forecasting, Order, Proforma Invoice, Dispatch Advice, etc

Other commercial measures including

trade documentation Any Purchase Order, Invoice, Packing List, Bill of Lading Advice, etc

Ship Transport and

related services

Forwarding and

cargo handling Freight settlement Any Freight Charge Invoice

Transport Loading port

activity

Any Shipping Schedule, Bay Plan, Stowage Plan, Hatch List, Container

Loading List

Dangerous goods DGL (Dangerous Goods List)

12

Shipping and

cross-border

transportation

Any Master/House Bill of Lading

Any AWB (Air Way Bill)

Any SWB (Sea Way Bill)

Entry port activity Any (Advance) Manifest

Transit Any Transit Declaration

Any Transit Bond (ATA Carnet, RCTG Carnet)

Cargo tracking Any Cargo status

Insurance Insurance Any Insurance Policy

Official

Control

Conformity

Certifying activity

at exporting and

importing country

Quarantine

Plants Phyto-Sanitary Certificate

Fumigation Certificate

Animals Veterinary Certificate

BSE/TSE Free Certificate

Animals, semen and

embryo, food, feed and

plants

Common Veterinary Entry Document

Animals, fishery and

others Sanitary Certificate

Other food and drugs

Health Certificate

Food Certificate

Organic Certificate

Certificate of Environmental Radioactivity Level

Standards and

quality control

General ISO and other international standards and quality certificates

National standard and quality certificates

Electronics (Lab) Test Certificate

Certificate of Analysis

13

Certification of Electrical and Electronic Components, Equipment and

Product

Medical equipment Certificate for medical devices

Pharmaceutical product CPP (Certificate of a Pharmaceutical Product)

Chemicals

(Lab) Test Certificate

Certificate of Analysis

MSDS (Material Safety Data Sheet)

HALAL HALAL Certificate

Others Manufactured goods Certificate of Manufacture

Endangered species CITES Certificate

Regulatory

compliance activity

at exporting country

(and importing

country)

Country of Origin

Goods under non-

preferential rate Certificate of Origin

Goods under preferential

rate

FTA Certificate of Origin, GSP Certificate of Origin, GSTP

Certificate of Origin, Origin Declaration, Back to Back Certificate of

Origin, APTA Certificate of Origin

Quota Goods under quota

control VISA

Permit Goods required prior

import permit Import Permit

Licensing

TBC

Crew/Passenger Crew/Passenger Crew/Passenger list

Customs Export

clearance (import

clearance)

Import Declaration

Export Declaration

AEO

AEO List (Profile)

Risk Management

Export Declaration

Pay Payment

Trade financing

Letter of Credit

Trade settlement Presentation of

trade documents Bill of Exchange etc

14

3. Specification on cross-border trade documents and data

3.1 Business Opportunity Finding

3.1.1 Offer, Counter Offer and Proforma Invoice

Document Title(s) Offer, Counter Offer, Enquiry and brochure

Issuing party Buyer and Seller

(Final) recipient Buyer and Seller

Category Buy/Ship/Pay Buy

UNLK Commercial Transaction

Processes Cross-border process Business Opportunity Finding

Sub process

Products/Services N/A

Technical Standard for Cross-

Border Transactions N/A

International

Convention/Agreement N/A

Bilateral/Regional Agreement N/A

Scope/Services Business Opportunity Finding

Cross-Border Paperless Trade

Project Cases

Korea - Japan e-MP Project,

Private B2B e-Marketplace Amazon, Alibaba

and EC21 etc...

Data Elements N/A

Notes

15

3.2 Contract

3.2.1 Contract and Framework Contract

Document Title(s) Contract, Framework Contract

Issuing party Buyer and Seller

Final recipient Buyer and Seller



Processe

s

Cross-border

process Contract

Sub process




International

Convention/Agreement

United Nations Convention on

the Use of Electronic

Communications in

International Contracts

http://www.uncitral.org/pdf/

english/texts/electcom/06-

57452_Ebook.pdf


Scope/Services

To formally and legally enter an

agreement between seller and

buyer on a sale of goods


Project Cases N/A

Data Elements

Notes

16

3.3 Order and production monitoring

3.3.1 Delivery Forecasting, Order, Proforma Invoice, Dispatch Advice, etc.

Document Title(s) Delivery Forecasting, Order, Proforma Invoice, Dispatch

Advice etc.

Issuing party Buyer, Seller, Manufacturer or agent

Final recipient Buyer, Seller, Manufacturer or agent



Processes Cross-border process Order and production monitoring

Sub process



Border Transactions UN/EDIFACT, ANSI, ODETTE and etc

International


To provide information regarding

order, production, expected date of

arrival and others for business

fulfillment and efficient supply chain

management

Bilateral/Regional Agreement

Scope/Services

Business data and document

exchange to enhance efficiency in

production and distribution processes

including but not limited to

documents for supply chain

management


Project Cases

Private international B2B supply chain

transactions

GM, Chrysler,

Bosch, Renault etc.

Data Elements

Notes

17

3.4 Other commercial measures

3.4.1 Purchase Order, Invoice, Packing List, Bill of Lading Advice etc.

Document Title(s) Purchase Order, Invoice, Packing List, Bill of Lading Advice

etc.

Issuing party Buyer, Seller, Manufacturer or agent

Final recipient Buyer, Seller, Manufacturer or agent



Processes Cross-border process

Other commercial measures including trade

documentation

Sub process




International


United Nations Convention on the

Use of Electronic. Communications in

International Contracts


Scope/Services

To develop documents for shipping,

financing and other trade business

fulfillments


Project Cases

PAA Secure Cross-Border Transaction

Service PAA.net

TEDI project

Data Elements

Notes

18

3.5 Forwarding and cargo handling

3.5.1 Freight Charge Invoice

Document Title(s) Freight Charge Invoice

Issuing party Freight forwarder

Final recipient Freight forwarder

Category Buy/Ship/Pay Ship

UNLK Transport and Related Services

Processes Cross-border process Forwarding and cargo handling

Sub process Freight settlement

Products/Services



International



Scope/Services To issue invoice for a service related

to freight management

Cross-Border Paperless Trade N/A

Data Elements N/A

Notes N/A

19

3.6 Transport

3.6.1 Shipping Schedule, Bay Plan, Stowage Plan, Hatch List, Container Loading List etc.

Document Title(s) Shipping Schedule, Bay Plan, Stowage Plan, Hatch List,

Container Loading List etc.

Issuing party Cross-border Carrier

Final recipient Port and/or CY



Processe

s

Cross-border process Transport

Sub process Loading port activity, unloading port activity



Border Transactions UN/EDIFACT, SMDG BAPLIE message

International



Scope/Services

To inform stakeholders on a vessel

and cargo status for future

arrangement of shipping of cargo


Project Cases

IATA e-Freight

http://www.iata.or

g/whatwedo/cargo

/e/efreight/Pages/i

ndex.aspx

Bay Plan Initiative Project (Canada

CBSA with US CBP)

http://www.shipfed

.ca/data/circular_le

tter/9553attach3.p

df

Data Elements

Notes

20

3.6.2 Shipping Schedule, Bay Plan, Stowage Plan, Hatch List, Container Loading List etc.

Document Title(s) DGL (Dangerous Goods List)

Issuing party Exporter

Final recipient Freight Forwarder, Cross-border carrier, Port Authority, CY



Processes Cross-border process Transport

Sub process Loading port activity

Products/Services Dangerous goods


Border Transactions

IATA Dangerous Goods Regulations

(DGR)

International Maritime Dangerous

(IMDG) Code

UN Dangerous Goods List

International


International Convention for the

Safety of Life at Sea (SOLAS) and the

International Convention for the

Prevention of Pollution from Ships

(MARPOL 73/78)

HNS Convention

UN Globally Harmonised System of

Classification and Labelling of

Chemicals (GHS).


Scope/Services

To declare dangerous goods to

authority and related service

providers


Project Cases e-DGR

Data Elements

Notes

21

3.6.3 Master/House Bill of Lading

Document Title(s) Master/House Bill of Lading

Issuing party Freight forwarder, Cross-border carrier

Final recipient Buyer




Sub process Shipping and cross-border transportation

Products/Services Any


Border Transactions UN/EDIFACT

International


CMI Rules:

“Right of Control and Transfer” (Rule 4)

UNCITRAL Model Law on Electronic

Commerce:

“unique” – Art. 17(3) and (4)

Rotterdam Rules:

“exclusive control” – Art. 1(21) and (22)

(defines “transfer” and “issuance” which

in turn define “holder”)

“right of control” and “controlling party”

– Art. 50 and Art.51

eUCP:

Presentation of electronic records (art

e5) (NB notice of completeness art e5(c))

Authentication (art e5(f), art e3(b)(1), art

e12)


Scope/Services To hold or transfer the title of goods


Project Cases

Bolero Title Registry

uTradeHub e-B/L Central Registry https://www.utr

adehub.or.kr/

ESS-Databridge

Data Elements

22

Notes

23

3.6.4 Air Way Bill

Document Title(s) AWB (Air Way Bill)

Issuing party Cross-border carrier








Border Transactions Cargo-IMP, Cargo-XML

International


Montreal Convention (MC99),

Montreal Protocol (MP4), IATA

Resolution 672


Scope/Services Non-transferable, proof of holder


Project Cases

PAA e-AWB www.paa.net

IATA e-Airway Bill

http://www.iata.or

g/whatwedo/cargo

/e/eawb/Pages/ind

ex.aspx

Data Elements

Notes

24

3.6.5 Sea Way Bill

Document Title(s) SWB (Sea Way Bill)









Border Transactions

International


CMI (Committee Maritime

International) Uniform Rules for Sea

Waybills


Scope/Services Non-transferable, proof of holder


Project Cases

Internet Sea Waybill Transmission by

Hapag-Lloyd

Data Elements

Notes

25

3.6.6 Manifest

Document Title(s) (Advance) Manifest

Issuing party Cross-border carrier, Freight Forwarder

Final recipient Port Authority, Customs



Processes

Cross-border

process Transport

Sub process Entry port activity



Border Transactions

WCO SAFE Framework of Standards -

World Customs Organization

International


WCO SAFE Framework of Standards -

World Customs Organization

Bilateral/Regional Agreement TBC

Scope/Services

To inform authority of importing

country on the list of goods and

related stakeholders for advance risk

analysis


Project Cases

USA AMS

http://www.cbp.gov/

border-

security/ports-

entry/cargo-security

EU ICS

http://ec.europa.eu/

ecip/help/faq/ens7_

en.htm

Japan AFR http://www.naccsce

nter.com/afr/

Data Elements

Notes

26

3.6.7 Transit Declaration

Document Title(s) Transit Declaration

Issuing party Freight Forwarder, ground transport etc.

Final recipient Customs, immigration

Categor

y

Buy/Ship/Pay Ship


Process

es

Cross-border process Transport

Sub process Transit



Border Transactions

e-TIR

WCO data model

International


TIR Convention (The Convention on

International Transport of Goods Under

Cover of TIR Carnets)

WCO Transit Guideline


EAC Single Customs Territory

ASEAN ATIGA Agreement for goods in

transit

Scope/Services To report transit declaration to border

control authorities


Project Cases

EAC RADDEx 1.0 http://www.compe

teafrica.org/Files/R

ADDEx_2.0_brief_S

ept.2012.pdf EAC RADDEx 2.0,

EAC SCT (Single Customs Territory)

https://www.trade

markea.com/blog/

single-customs-

territory/

COMESA Regional Customs Transit

Guarantee (RCTG) system

http://rctg-

new.comesa.int/

SADC Web based Transit Data Transfer

Module; TDTM

27

The ASEAN Customs Transit System

(ACTS)

A MODERN

REGIONAL

TRANSIT

TRANSPORT

SYSTEM: ASEAN

CUSTOMS

TRANSIT SYSTEM

(ACTS) TO ENSURE

AEC TRADE

FACILITATION

e-TIR

http://www.unece.

org/trans/bcf/etir/

welcome.html

UNDA Project on Customs-to

Customs(C2C) electronic information

exchange for transit

http://www.unece.

org/fileadmin/DA

M/trans/doc/them

es/UNDAC2C/Flyer

_UNDA_TIR.pdf

Data Elements

Notes

28

3.6.8 Transit Bond

Document title(s) Transit Bond (ATA Carnet, RCTG Carnet)

Issuing party

Final recipient




Sub process Transit



Border Transactions

International


Customs Convention on the ATA

carnet for the temporary admission

of goods (ATA Convention)

Istanbul Convention on Temporary

Admission


COMESA CARNET (RCTGCARNET)/or

COMESA Treaty (COMESA Protocol

on Transit Trade and Transit

Facilitation, Annex I)

Scope/Services


Project Cases

COMESA Regional Customs Transit

Guarantee (RCTG) system

http://rctg-

new.comesa.int/

Data Elements

Notes

29

3.6.9 Cargo status

Document title(s) Cargo status

Issuing party Cross-border carrier, Freight Forwarder, Port Authority,

Customs etc.

Final recipient Trading company, Freight Forwarder, Port Authority,

Customs etc.




Sub process Cargo tracking




International



Memorandum of Understanding on

the Cooperation Mechanism of

Northeast Asia Logistics Information

Service Network

Scope/Services


Project Cases

PAA Cargo Visibility

NEAL-NET http://www.nealne

t.org/

Data Elements

Notes

30

3.7 Insurance

3.7.1 Insurance Policy

Document Title(s) Insurance Policy

Issuing party Insurance company

Final recipient Seller and/or Buyer



Processes Cross-border process Insurance

Sub process Insurance




International



Scope/Services


Project Cases

Lloyd's Electronic Cargo Certificates

(LECC)

Data Elements

Notes

31

3.8 Conformity certifying activity

3.8.1 Phyto-Sanitary Certificate

Document Title(s) Phyto-Sanitary Certificate

Issuing party National Plant Protection Organization (exporting country)

Final recipient National Plant Protection Organization (importing country)


UNLK Official Control


Conformity Certifying activity at exporting country and

importing country

Sub process Quarantine

Products/Services Plants


Border Transactions

e-phyto (UN/EDIFACT SPS XML

Schema, UN/EDIFACT encryption

system, Communication on status of

message exchange between NPPOs

etc.)

http://ephyto.ippc.

int/

International


IPPC (International Plant Protection

Convention)

http://ephyto.ippc.

int/


Scope/Services


Project Cases

e-Phyto exchange (ROK-Netherland,

China-Netherland, Kenya-Netherland)

e-Phyto HuB

EU SEED (Systematic Electronic

Exchange of Data)

http://www.eu-

seed.net/pages/pr

ojectinfo.aspx

Data Elements

Notes

32

3.8.2 Fumigation Certificate

Document Title(s) Fumigation Certificate

Issuing party Fumigation Service Provider

Final recipient National Plant Protection Organization (importing country)





importing country


Products/Services Agricultural product



International



Scope/Services N/A


Project Cases N/A

Data Elements N/A

Notes N/A

33

3.8.3 Veterinary Certificate

Document Title(s) Veterinary Certificate (Certificate of Veterinary Issuance)

Issuing party Veterinary Authority of the exporting country

Final recipient Veterinary Authority of the importing country



Processes

Cross-border

process

Conformity Certifying activity at exporting country and importing

country


Products/Services Animals

Technical Standard for

Cross-Border

Transactions

UN/EDIFACT eCert

International

Convention/Agreement OIE e-Certification

http://web.oie.int/eng/normes/mcode/

en_chapitre_1.5.2.pdf

Bilateral/Regional

Agreement

Scope/Services

Cross-Border Paperless

Trade Project Cases

eCert (Australia-Japan)

eCert (New Zealand-USA)

Data Elements

Notes

34

3.8.4 BSE/TSE Free Certificate

Document Title(s) BSE/TSE Free Certificate







importing country


Products/Services Animals



International



Scope/Services N/A


Project Cases N/A

Data Elements N/A

Notes N/A

35

3.8.5 Common Veterinary Entry Document

No. Document

(and related process) Common Veterinary Entry Document







importing country


Products/Services animals, semen and embryo, food, feed and plants


Border Transactions

International


Bilateral/Regional Agreement The EU Commission Decision

2004/292/EC

Scope/Services

Common Veterinary Entry Documents

for animals and products entering the

European Union


Project Cases

TRACES (Trade Control and Expert

System)

http://ec.europa.e

u/food/animal/dis

eases/traces/index

_en.htm

Data Elements

Notes

36

3.8.6 Sanitary Certificate

Document Title(s) Sanitary Certificate







importing country


Products/Services Animals, fishery and others


Border Transactions

International



Scope/Services


Project Cases

e-Cert (Australia, New Zealand, USA

and Canada),

http://www.unec

e.org/fileadmin/

DAM/trade/secur

ity_conf03/docs/

brochure%20info

.pdf

Data Elements

Notes

37

3.8.7 Pharmaceutical Certificate

Document Title(s) Pharmaceutical Certificate

Issuing party Drug regulatory authority

Final recipient Drug regulatory authority





importing country


Products/Services Pharmaceutical drugs



International



Scope/Services N/A


Project Cases N/A

Data Elements

• Exporting country

• Importing country

• Name, dosage (pharmaceutical)

form and composition of the

product [active ingredient(s) and

amount(s) per unit dose]

• Information on registration

(licensing) and marketing

(presence on the market) status

of the product in the exporting

country

• Number of product license

(including license holder details,

license holder’s involvement in

manufacturing if any) and date of

issue, if applicable

38

• Appended summary of technical

basis on which the product has

been licensed (if required by the

issuing authority)

• Appended current product

information

• Details on the applicant for the

CPP

• If marketing authorization is

lacking in the exporting country,

information about reasons

Notes N/A

39

3.8.8 Health Certificate

Document Title(s) Health Certificate

Issuing party

Final recipient





importing country


Products/Services Other food and drugs


Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

40

3.8.9 Food Certificate

Document Title(s) Food Certificate

Issuing party

Final recipient





importing country




Border Transactions The Codex Alimentarius

http://www.fao.org

/fao-who-

codexalimentarius/

standards/en/

International

Convention/Agreement Codex Alimentarius Commission


Scope/Services


Project Cases

Data Elements

Notes

41

3.8.10 Organic Certificate

Document title(s) Organic Certificate

Issuing party

Final recipient





importing country





International



Scope/Services N/A


Project Cases N/A

Data Elements N/A

Notes N/A

42

3.8.11 Certificate of Environmental Radioactivity Level

Document Title(s) Certificate of Environmental Radioactivity Level

Issuing party

Final recipient





importing country




Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

43

3.8.12 ISO and other international standards and quality certificates

Document Title(s) ISO and other international standards and quality

certificates

Issuing party

Final recipient





importing country

Sub process Standards and quality control

Products/Services General


Border Transactions

International

Convention/Agreement ISO


Scope/Services


Project Cases

Data Elements

Notes

44

3.8.13 National standard and quality certificates

Document Title(s) National standard and quality certificates

Issuing party National or Certified Conformity Body

Final recipient National or Certified Conformity Body





importing country


Products/Services General



International



Scope/Services

To proof that the goods (and

services) are in conformity with

specific national regulatory

requirements on standard and quality

of goods and services


Project Cases N/A

Data Elements

Notes

45

3.8.14 (Lab) Test Certificate

No. Document (Lab) Test Certificate

Issuing party Certified Laboratory in exporting country

Final recipient Customs and/or OGAs





importing country


Products/Services Electronics


Border Transactions IEC NCB

International



Scope/Services


Project Cases

Data Elements

Notes

46

3.8.15 Certificate of Analysis

No. Document

(and related process) Certificate of Analysis

Issuing party

Final recipient





importing country




Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

47

3.8.16 Certification of Electrical and Electronic Components, Equipment and Product

Document Title(s) Certification of Electrical and Electronic Components,

Equipment and Product

Issuing party

Final recipient





importing country




Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

48

3.8.17 Certificate for medical devices

Document Title(s) Certificate for medical devices

Issuing party

Final recipient





importing country


Products/Services Medical equipment


Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

49

3.8.18 Certificate of a Pharmaceutical Product

Document Title(s) CPP (Certificate of a Pharmaceutical Product)

Issuing party

Final recipient





importing country


Products/Services Pharmaceutical product


Border Transactions

WHO Model certificate of a

pharmaceutical product

International


Guidelines on the implementation of

the WHO certification scheme on the

quality of pharmaceutical products

moving in international commerce


Scope/Services


Project Cases

Data Elements

Notes

50

3.8.19 (Lab) Test Certificate

No. Document

(and related process) (Lab) Test Certificate

Issuing party

Final recipient





importing country


Products/Services Chemicals


Border Transactions

International



Scope/Services


Project Cases

APLAC (ILAC) MRA

https://www.aplac.

org/aplac_mra.htm

l

APEC TEL MRA

http://www.apec.or

g/Groups/SOM-

Steering-

Committee-on-

Economic-and-

Technical-

Cooperation/Work

ing-

Groups/Telecomm

unications-and-

Information/APEC_

TEL-MRA.aspx

OECD MAD

http://www.oecd.o

rg/chemicalsafety/

testing/mutualacc

51

eptanceofdatamad

.htm

IECEE MRA

http://www.iecee.o

rg/cbscheme/pdf/i

ecee02.pdf

Data Elements

Notes

52

3.8.20 Certificate of Analysis

Document Title(s) Certificate of Analysis

Issuing party

Final recipient





importing country




Border Transactions

International



Scope/Services


Project Cases

APLAC (ILAC) MRA https://www.aplac.or

g/aplac_mra.html

APEC TEL MRA

http://www.apec.org

/Groups/SOM-

Steering-

Committee-on-

Economic-and-

Technical-

Cooperation/Workin

g-

Groups/Telecommu

nications-and-

Information/APEC_T

EL-MRA.aspx

OECD MAD

http://www.oecd.org

/chemicalsafety/testi

ng/mutualacceptanc

eofdatamad.htm

53

IECEE MRA

http://www.iecee.or

g/cbscheme/pdf/iec

ee02.pdf

Data Elements

Notes

54

3.8.21 Material Safety Data Sheet

Document Title(s) MSDS (Material Safety Data Sheet)

Issuing party Exporter

Final recipient Customs, Port Authority, CY etc.





importing country





International



Scope/Services N/A


Project Cases N/A

Data Elements N/A

Notes N/A

55

3.8.22 Halal Certificate

Document Title(s) Halal Certificate

Issuing party

Final recipient



Processes

Cross-border

process


importing country


Products/Services Halal


Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

56

3.8.23 Certificate of Manufacture

Document Title(s) Certificate of Manufacture

Issuing party

Final recipient



Processes

Cross-border

process


importing country

Sub process Others

Products/Services


Border Transactions

International



Scope/Services


Project Cases

Data Elements

Notes

57

3.8.24 CITES Certificate

Document Title(s) CITES Certificate

Issuing party

Final recipient



Processes

Cross-border

process


importing country

Sub process Others

Products/Services Endangered species


Border Transactions

The CITES electronic

permitting toolkit

International


the Convention on

International Trade in

Endangered Species of Wild

Fauna and Flora


Scope/Services

Cross-Border Paperless Trade e-CITES

Data Elements

Notes

58

3.9 Regulatory compliance activity

3.9.1 Certificate of Origin

Document Title(s) Certificate of Origin

Issuing party Ministry of Commerce, Customs or Chamber of Commerce

Final recipient Customs, Buyer




Regulatory compliance activity at exporting country (and

importing country)

Sub process Country of Origin

Products/Services Non-preferential goods


Border Transactions UN/EDIFACT, WCO DM, ICC

International


Bilateral/Regional Agreement MOU between Korea and

Taiwan

Scope/Services


Project Cases

Korea - Taiwan(China) e-C/O

ICC CO Verification website https://certificates.iccwbo.org/

Data Elements

Notes

59

3.9.2 Preferential Certificate of Origin

Document Title(s)

FTA Certificate of Origin, GSP Certificate of Origin, GSTP

Certificate of Origin, Origin Declaration, Back to Back

Certificate of Origin, APTA Certificate of Origin

Issuing party Ministry of Commerce, Customs or Chamber of Commerce

Final recipient Customs





importing country)

Sub process Country of Origin

Products/Services Goods under preferential rate


Border Transactions UN/EDIFACT, WCO DM

International



ATIGA

China – Hong Kong (?)

China – Macau (?)

China – Taiwan (?)

China – Korea FTA

Scope/Services


Project Cases

ASEAN NSW ATIGA Form D

http://asw.asean.or

g/

http://unnext.unes

cap.org/tools/dhm

g-annex4-1.pdf

China - Hong Kong (China) e-C/O

https://www.tid.go

v.hk/english/cepa/f

iles/annex3.pdf

China - Taiwan (China) e-C/O

http://www.e-to-

china.com/tariff_ch

anges/Policy_Focu

s/2014/0401/1121

14.html

60

WAEMU Pilot projects to set up an

electronic certificate of origin exchange

platform in AFRICA

http://www.gainde

2000.sn/2014/en/n

ews-10.php

http://www.unece.

org/fileadmin/DA

M/cefact/cf_plenar

y/plenary14/ECE_T

RADE_C_CEFACT_2

014_4E_Rapporteu

rAfrique.pdf

Data Elements

Notes

61

3.9.3 Import Permit

Document Title(s) Import Permit

Issuing party Customs or OGAs

Final recipient Customs or OGAs





importing country)

Sub process Permit

Products/Services



International



Scope/Services N/A


Project Cases N/A

Data Elements N/A

Notes N/A

62

3.9.4 Crew/Passenger list

Document Title(s) Crew/Passenger list


Final recipient Immigration and/or Customs





importing country)

Sub process Crew/Passenger

Products/Services Crew/Passenger


Border Transactions

International



Scope/Services


Project Cases

APIS (Advanced Passenger

Information System)

Data Elements

Notes

63

3.10 Customs Clearance

3.10.1 Customs Export Declaration

Document Title(s) Customs Export Declaration

Issuing party Customs in exporting country

Final recipient Exporter or Customs in importing country



Processes

Cross-border process Export clearance (and import clearance)

Sub process Import Declaration

Risk Management

Products/Services


Border Transactions

International



Scope/Services


Project Cases

Asian Region Customs EDI project

Korea-Philippines

EEC //

ASW pilot project

Data Elements

Notes Globally Networked Customs

(Concept)

http://www.wcoom

d.org/en/topics/fa

cilitation/activities-

and-

programmes/gnc.a

spx

64

3.10.2 AEO List (Profile)

Document Title(s) AEO List (Profile)

Issuing party Customs

Final recipient Customs



Processes Cross-border process Export clearance (and import clearance)

Sub process AEO

Products/Services


Border Transactions

International



Scope/Services


Project Cases Malaysia – Japan MRA

Data Elements

Notes

65

3.11 Trade Financing

3.11.1 Letter of Credit

No. Document

(and related process) Letter of Credit

Issuing party Issuing Bank

Final recipient Seller

Category Buy/Ship/Pay Pay

UNLK Payment

Processes Cross-border process Trade financing

Sub process

Products/Services


Border Transactions

UN/EDIFACT

SWIFT

International

Convention/Agreement SWIFT (TBC)


Scope/Services To issue Letter of Credit and

transfer it to notify bank


Project Cases

uTradeHub trade financing Utradehub.or.kr

SWIFT TSU & BPO

Applications for Supply

Chain Management, Trade

Services Utility 2.0.2,

Release Letter

http://www.swift.com/asse

ts/corporates/documents/

business_areas/trade_case

_study_vale_bank_of_tokyo

_mitsubishi.pdf

TradeCard http://www.gtnexus.com/

Data Elements

Notes

66

3.12 Trade Settlement

3.12.1 Bill of Exchange etc.

Document Title(s) Bill of Exchange etc. (with Letter of Credit, Bill of Lading,

Invoice, Packing List)

Issuing party Exporter(Seller)

Final recipient Bank (or Importer)

Category Buy/Ship/Pay Pay

UNLK Payment

Processes

Cross-border

process

Trade settlement

Sub process Presentation of trade documents

Products/Services



International



Scope/Services


Project Cases

Bolero e-L/C http://www.bolero.

net/products

Bolero e-Presentation

http://www.bolero.

net/products/elect

ronic-document-

presentation

TEDI

Private online payment tool (PayPal,

Alipay)

Paypal.com and

Alipay.com

uTradeHub e-Nego service https://www.utrad

ehub.or.kr/

SWIFT TSU & BPO

Applications for

Supply Chain

Management,

Trade Services

67

Utility 2.0.2,

Release Letter

http://www.swift.c

om/assets/corpora

tes/documents/bu

siness_areas/trade

_case_study_vale_b

ank_of_tokyo_mits

ubishi.pdf

TradeCard http://www.gtnexu

s.com/

Data Elements

Notes

68

4. Cross-border paperless trade project directory

4.1 International supply chain and EDI

In the past, the only way to move paper documents was mailing or using a courier service. With

the introduction of faxmachine in 1960s, international trade community welcomed this new

vehicle and it quickly became a dominant tool for business communication. However, it remained

as an information transmitter with no other options. So, when EDI message formats and VANs

brought the first effective support for electronic document exchange, EDI deployments quickly

expanded from the transportation sector to many other industries. While originally limited to the

largest firms in these sectors, many SMBs have since adopted EDI as well.

Currently, there are open international, national and industry standards defining the format of EDI

documents. Most widely accepted EDI standard is the UN/EDIFACT standard. And various sub-

versions such as ODETTE for European automotive sector have been derived from it. Another

dominant standard is ANSI X12. It is widely used in the Americas and it provides guidelines for

more than 300 standard business documents and supports industry-specific variations like UCS

(grocery and retail) and VICS (retail and CPG) that provide additional message format details used

in these sectors.

69

Table 7 Typical open B2B EDI message standards

Before the implementation of EDI, the general procurement procedure is as below:

• The buyer determines to place an order after querying the inventory system or

inventory system automatically notifies the buyer

• The buyer creates the Purchase Order by entering data into the purchasing

system, prints, signs and/or stamps and mails it

• Days after, the supplier receives the Purchase Order and manually enters order

information into the sales system

• When shipment is ready, the supplier prints an Invoice and other shipping

documents and encloses them with the shipment and/or sends it separately by

mail

• The buyer receives Invoice and other shipping documents manually and enters

the information into the accounts system

In general, depending on the distances and logistics infrastructure, the exchange of paper

documents can take days to the process. If there are errors caused by manual data entry, the time

can be greatly increased. However, with the introduction of EDI, there was a big change in doing

business because this EDI process can be completed within hours saving time and cost of both

70

parties compared to the manual process. The procurement procedure with EDI will be as below:

• The buyer’s procurement system automatically generates and places an EDI-

formatted (or any other format) Purchase Order when inventory reaches the

critical level.

• Within minutes the supplier’s sales system receives the EDI Purchase Order,

notifies the shipping department to ship the goods and generates an EDI

Invoice to be transmitted directly to the buyer’s accounts system

With the improvement of IT technology and outspread of global sourcing in procurement, major

multi-national companies have implemented advanced supply chain management system or

supplier relationship management system beyond automated procurement system to reduce

inventory cost and to expand the visibility.

Supply chain planning process

• Market research

• Demand forecast (6 months, 3 months, 2 months 150 days)

• Determine Inventory level

• Place forecast, order

• Manage material production status

• Review inventory level

• Adjust demand forecast

Table 8 Typical online B2B transaction documents

71

Traditionally, EDI was the most dominant B2B transaction message. But it is not the fact in recent

years. There was a very interesting survey on B2B transactions conducted by Forrest Research. The

result indicates that the most common message format (42% of the total) is now spreadsheets

and other text documents. EDI comes in a close second (41%); followed by industry standard XML

(36%); financial formats like SWIFT (35%); flat files (33%); proprietary XML (25%); and RosettaNet

(21%)4.

EDI is no longer the most dominant message format but EDI transactions are rather increasing. In

fact, a review of the EDI volume statistics indicates that the annual volume of global EDI

transactions exceeds 20 billion per year and is still growing 5 even excluding direct B2B

transactions.

4 The future of EDI, 2011, Forrester Research

5 The Forrest Wave: B2B Service Providers, Q4 2009, 2009

72

Figure 1 B2B data formats of enterprises

The research also states that “the annual volume of global EDI transactions exceeds 20 billion per

year and is still growing.” For buyers that handle numerous transactions, using EDI can result in

millions of dollars of annual savings due to early payment discounts. From a financial perspective

alone, there are impressive benefits from implementing EDI. Exchanging documents electronically

improves transaction speed and visibility while decreasing the amount of money you spend on

manual processes. But cost savings is far from the only benefit of using EDI.

4.2 Electronic Marketplace for international trade and transactions

In early 2000, some governments had tried to incubate online Marketplace industry and spent

huge budget to support them as they saw huge potential that this emerging internet technology

could bring to the international trade. But most of their efforts were in vain, most probably

because it was too early to incubate those in the immature market or government led e-

marketplace were not efficient nor adaptive to the change of market demands. However, there

have been continuous efforts from private sectors to innovate business practice from offline to

online and some of them results huge success changing the paradigm of trade business. Now the

recent huge success of one cross-border e-commerce service provider; Alibaba became a

phenomenon among the related department of governments and many of them are putting their

nose again into the e-MarketPlace business. In the past, the business of area of e-MarketPlace

were only matchmaking business to other business before the contract, but, as shown in Figure

below, they are evolving into actual transaction and post-transaction service providers covering

contract and post-contract trade services areas.

73

Figure 2 Immerging Third Party Platforms in China6

4.3 Cross-border logistics information sharing – Neal-Net7

Background

Three countries in North East Asia; China, Japan and Republic of Korea, have traditionally

emphasized on the important role of international trade in their economic growth. Nowadays, the

economies of the three countries are more interconnected under value chains with each other and

the efficiency of the logistics sector is more important than ever. The increasing sub-regional trade

led the surge of transport volume and calls for seamless logistics information systems preferential

policies for the facilitation of cargo movement between the three countries. However, the current

logistics information transmits inefficiently information islands occur, resulting in high cost low

efficiency of the logistics sector.

To improve the logistics service capacity efficiency of Northeast Asia, a cooperative mechanism on

North-East Asia Logistics Information Service Network (NEAL-NET) was agreed in the Third China-

Japan-Korea Ministerial Conference on Transport Logistics and the 1st NEAL-NET Council Meeting

was held in December 2010. NEAL-NET is a transnational, non-profit cooperative mechanism for

6 Integrated Foreign Trade Service Platform Based on PPP Model in China, Prof. Jian Wang (2015)

7 Most information is quoted from the official Neal-net website, http://www.nealnet.org/

74

logistics information exchange, sharing technological cooperation. The objective of NEAL-NET is

as follow;

1. To interconnect logistics information systems of China Japan and Republic of Korea

2. To encourage researches on logistics information standards technologies

3. To promote technological exchange, training popularization of logistics information

systems

Accomplishments and limitations

At this stage, NEAL‐NET cooperation mainly focuses on International Marine Transport. Since

container transport is the most mature and standardized international transport business, at the

very first step, container transport was selected as contents of pilot program.

Figure 3 Event based data sharing model of NEAL-NET8

Container status tracking is a typical case of tracking business. More than 9 basic events were

abstracted and technical framework was designed by NEAL‐NET. Defined dynamic vessel status

8 Toward the realization of SCV, A Introduction of NEAL‐NET, 2012

75

and container status sharing standards are as below:

• Vessel related properties: ETA (Estimated Time of Arrival), ATA (Actual time of

Arrival), Cy‐Open (Container Yard Open), Cy‐Cut (Container Yard Cut), ATD

(Actual Time of Departure)

• Container properties: Unloading, Container departure, Container Entering,

Loading.

To evaluate the function of interface, pilot project was conducted by selected typical platforms

and ports in China, Japan and the Rep. of Korea respectively. China selected National Public

Information Sharing Platform for Transportation & Logistics (LOGINK) and Ningbo‐Zhoushan Port

to join evaluation. Japan selected Tokyo‐Yokohama Port to join evaluation and Korea selected

SPIDC as Korean plat form and Busan Port to join the evaluation. China, Japan and the Rep. of

Korea platforms provided query interface of container status and dynamic vessel schedule which

comply with NEAL‐NET Standard. In 2012, the pilots went successfully achieving its first stage.

Now NEAL-NET is expanding its coverage to other ports in the sub-region and planning to

expand to EU and ASEAN in that near future. It is also hoped that in the near future, logistics

information sharing could be expanded to Air Transport and International Railway or Truck

Transport through NEAL-NET.

Figure 4 Logistics information sharing of NEAL-NET

76

There are some concerns regarding the service and expansion of NEAL-NET. NEAL-NET has spent

huge resource to harmonize the codes and document slowing down its implementation and lots

of capacity building programs have been provided to port operators at a sub-regional level.

However as there has been no international standards for logistics information sharing, except

some commercial services, many existing public logistics system does not have capability in its

platform to interconnect with NEAL-NET nor meets the standards that NEAL-NET has developed.

Some other constraint is that some existing logistics platform are selling the logistics information

at commercial base while NEAL-NET is a non-profit organization and there could be a conflict in

the expansion of the NEAL-NET.

4.4 Cross-Border exchange of e-Phyto Certificate

Background

Introduction of electronic Certificate of Sanitary and Phyto-Sanitary have been subject of

discussion for many years. Sanitary and Phyto-sanitary (SPS) certificates are required for the

majority of agricultural products traded around the world. On these certificates exporting

countries verify food safety and that the product meets the requirements of the importing country.

One of the early initiative on e-Certificate of Sanitary and Phyto-Sanitary was led by

Australia and New Zealand. Two governments have collaborated to develop and implement a web

based system for electronic Certificate of Sanitary and Phyto-Sanitary, known as E-cert. This

partnership was formed following the Food Safety Quadrilaterals in Hawaii in 2002 where Australia,

New Zealand, Canada and the USA made commitments to trial E-cert for meat shipments during

20039. A pilot System was released on 1 July 2003 and went ‘live’ in early 2004. This e-Cert project

between Australia and New Zealand was very meaning and gain international attention as a

pioneering G2G project. APEC endorsed it as a one of paperless trade path finder projects at the

9 E-cert FACT SHEET – Australian Quarantine and Inspection Service

77

APEC Leaders meeting in Los Cabos in 2002 and e-SPS was included in APEC Trade Facilitation

Action Plan. But it has its limits as the system was available for read only access over the web

helping other government agencies verifying the contents of the Certificate reducing the

opportunity for fraudulent activity.

Phyto-Sanitary Certificate is an official document issued by the national plant protection

organization (NPPO) of the exporting country to the national plant protection organization (NPPO)

of the importing country. It certifies that the plants or plant products covered by the certificate

have been inspected per appropriate procedures and are free from pests and that they are

considered to conform to the current phyto-sanitary regulations of the importing country. With

the current concerns over health and food safety and the viral spread of disease, there is great

interest in facilitating the movement of safe agricultural commodities.

History of e-Phyto Certificate initiatives

The first International Plant Protection Convention (IPPC) meeting on Phyto-Sanitary Certificate

was held in Wageningen, the Netherlands in January 2006. During this meeting the possibilities

and developments needed were discussed.

An expert working group (EWG) met in February 2008 to revise ISPM 7:1997 (Export certification

system) and ISPM 12:2001 (Guidelines for phytosanitary certificates). During the revision, it was

recognized specific guidance would be needed to deal with electronic certificates and a blank

Appendix 1 (Electronic certification, information on standard XML schemes and exchange

mechanisms) was included in the ISPM 12:2011 (Phytosanitary certificates). The report of this

meeting can be found on the IPPC website.

78

Figure 5 Phyto-Sanitary Certificate and e-Phyto

e-Phyto certification standards and procedures

IPPC has come up with a cross-border e-Phyto certification procedures through several work

group discussions. Several past and on-going cross-border (pilot) projects and a support of

UN/CEFACT for a harmonization of different standard messages were of great help to IPPC to set

up a standard measure of e-Phyto Certificates. In 2014, IPPC officially adapted revised

International Standards for Phytosanitary Measures 12 (‘PHYTOSANITARY CERTIFICATES’) with

appendix 1 (‘Electronic phytosanitary certificates, information on standard XML schemes and

exchange mechanism’)10.

Table 9 Comparison of paper and electronic certificates

Certificate type Paper Electronic

Phyto-Sanitrary

Certificate

Certificate date in hard copy,

stampled and signed

Certificate date in XML format,

authorized and encrypted

Copy certificate Photocopy or pdf of certificate Printout or viewer (web or pdf) or

Certificate data in XML format

10

https://www.ippc.int/sites/default/files/documents/20140903/ispm_12_2011_withappendix1_en_201

4-09-03_201409031056--208.3%20KB.pdf

79

Certificed copy Copy certificate stamped, dated

and countersigned

Printout of certificate data, stamped

dated, countersigned, or Certificate

data in XML format, re-encrypted

Figure 6 Guide to ePhyto

The standard measures defined in the ISPM 12 are reasonably flexible with minimum level of

requirements. The ISPM 12 does not restrict itself to a specific technical standard giving rooms to

national plant protection organizations (NPPOs) with more options in its implementation except

document standard. But the ISPM 12 strongly requires NPPOs being responsible for the security

of their national information technology (IT) system as well as message transmission. Some of the

technical requirements are as below;

• The data should be encrypted to ensure that the electronic exchange of the

electronic phytosanitary certification data between NPPOs is secure and

authenticated using a secure protocol with a minimum 128-bit encryption.

80

• Transmission of data over the Internet from the NPPO of the exporting country to

the NPPO of the importing country should be performed using secure IT

mechanisms (e.g. Simple Object Access Protocol (SOAP), Secure/Multipurpose

Internet Mail Extensions (S/MIME), File Transfer Protocol (FTP), Representative State

Transfer (REST)) using systems that are mutually compatible.

• Communication on the status of the message exchange between NPPOs should

follow UN/CEFACT recommended standard messages.

In the guide, the below procedures in the table 3 are recommended for cross-border e-Phyto

certification procedures.

Table 10 e-Phyto Certificate conversation specification

Action Name Description

1 Find a list of

certificates

Put the request to the NECS11 to return all certificate

numbers that meet the input criteria. Immediately after this

Request the NECS returns the list of numbers

2 Download a list of

certificates

Put the request to the NECS to return all certificates that

meet the input criteria. Immediately after this request the

NECS returns all the certificates

3 Change the status of

a certificate

Put the request to the NECS to change the status of a list of

certificates to the specified value. Immediately after this

request the NECS returns the process result for every

individual certificate (Success or Failed with reason)

4 Show the status of a

certificate

Put the request to the NECS to show the status of a list of

certificates. Immediately after this request the NECS returns

the status for every individual certificate (Success or Failed

with reason)

5 Show status of the

NECA

Put the request to the NECS to confirm that the NECS and

the network between the NECS and NICS12 are operational.

Immediately after this Request the NECS returns the

message OK

11 NECS: NPPO’s export certificate system

12 NICS: NPPO’s import certificate system

81

Figure 7 Cross-Border e-Phyto Certificate conversation

Cross-border e-Phyto Certificate exchange case of Republic of Korea

Korean government was introduced to electronic SPS initiative by APEC Trade Facilitation Action

Plan agreed in April 2004 and first discussion on the cross-border system was made at the Korea

– Taiwan province of China Plant Quarantine Conference as a tool for preventing the forgery of

Certificates and the fraud export of Chinese agriculture product. With a support from Australian

and New Zealand agencies, Korean plant quarantine agency developed its first eCert system. 1st

phase system provided web view access for foreign agencies in 2004 and provided IDs to

Australia, New Zealand and Taiwan province of China. And data transfer function (SOAP) was

implemented in 2005. However, Certificate data transfer was not very successful and Korean

quarantine agency kept used web view function.

82

Figure 8 Web-view access to Korean e-Cert system

In 2010, Korean plant quarantine agency upgraded the system using UN/CEFACT standard

document as well as improving its scalability. In 2011, Korean plant quarantine agency executive

cross-border Phyto-Sanitary Certificate exchange pilot project on seeds.

Figure 9 Export Cross-border Phyto-Sanitary Certificate from Korea

83

Figure 10 Import Cross-border Phyto-Sanitary Certificate to Korea

84

Figure 11 Import cross-border Phyto-Sanitary management

Achievements and Limitations

For its importance in international trade, e-Phyto Certificate has been one of the primary objects

for digitization for trade facilitation and counties with high portion of agricultural industry have

led the e-Phyto Certificate project together with e-Sanitary Certificate such as Netherland. And

harmonization of documents standard has been well cooperated with UN/CEFACT strengthening

its standardization.

However, so far the e-Phyto Certificate transaction remains as an adminicular information and

quarantine agencies still require paper Phyto Certificate for import quarantine declaration. And

another challenge that national quarantine agencies are facing is the burden of peer to peer

connection set by previous pilot projects. To address this issue, a new of e-Phyto Hub concept; a

85

central repository model, has been introduced in IPPC. This central repository model may can help

the peer to peer connection issue but it also has other constrains such as ownership of the

system, difficulties in catering local requirements, development cost and extra transaction fees by

commercialized service.

4.5 Advance Manifest System

Overview

From 2012, the Korea Customs Service (KCS) is requiring electronic advance manifest for cargo

being carried into and out of the customs territory of Korea. Submittal of information to the Korea

Manifest System (KMS) is as below:

• Goods imported via air transportation into Korea

• Goods exported via air or ocean transportation from Korea

Korea Customs has launched the Korea Manifest system to control illegal or counterfeit exports,

improve import clearance procedures and become aligned with international standards. Timing

requirements for sending shipment data to the KMS varies depending on which mode of

transportation is used to carry the goods:

• Short haul inbound flights (with a duration less than four hours) must be filed upon

departure;

• Long haul inbound flights (with a duration over four hours) must be filed at least 4

hours prior to arrival into Korea;

• Export air cargo must be filed 30 minutes prior to loading

• Containerized Maritime export cargo (except short sea shipping) must be filed at least 24 hours prior to loading at the port of departure;

• Bulk / Break bulk maritime export cargo (except short sea shipping) must be filed

prior to departure;

• Short Sea shipping maritime export cargo must be filed at least 30 minutes prior to departure

It is the responsibility of the forwarder/NVOCC to submit manifest data to the Master carriers

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directly but it is the responsibility of the parties tendering cargo to the carrier to provide accurate

information at the time of shipping instruction submission. Carriers will need to receive the

following information to submit a filing with the time limits specified:

• Shipper name and address

• Consignee name and address

• Precise goods description

• Type of packages

• Number of packages

• Container number (if applicable)

• Seal number (if applicable)

• Gross mass (kg)

• Export Good Permit Number (EPN)

Legal basis under the provisions of the Customs Act related to the Advance Manifest System

(hereinafter referred to as “the AMS”) is stated below:

• (Article 135, Clause 2) If it is required for going through rapid entry and customs

clearance procedure, and conducting efficient supervision and control, the collector of

customs (hereinafter referred to as “customs collector”) may have the shipping or

aviation company to which the ship or aircraft entering into the port submit the list of

passengers, manifest, etc. prior to the entry, under the conditions as prescribed by the

Commissioner of the Korea Customs Service.

• (Article 136, Clause 2) When a foreign trade vessel or aircraft desires to depart from an open port, the captain thereof shall, prior to departure, obtain a departure permit

from customs collector. The captain of a vessel or aircraft shall submit a list of goods

boarded at the open port.

• (Article 140, Clause 2) When goods are to be loaded to or unloaded from any foreign trade vessels or aircraft, a declaration thereon shall be made to customs collector and

confirmation thereon shall be obtained on the spot from customs officers.

Essential particulars related to the AMS, including timeline of submission, specification templates,

preparation method and application for corrections should comply with the “Notification of

Loading and Unloading Procedure of Entry and Departure for Bonded Cargo (2011-7, March 18,

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2011)” by the KCS. Based on the WCO SAFE Framework and in consideration of special

circumstance of short-flight or short-sea-shipping and capability of concerned logistics entities,

due date and time of submission defined by the KCS is as following:

Table 11 KAMS timeline of submission

Type Deadline

SEA Import (Principle) At least 24 hours before commencement of loading at

the port of loading.

(Short sea shipping) Before departure at the port of loading

(Bulk) At least 4 hours before arrival at the port of entry

Export (Principle) At least 24 hours before commencement of loading

(Short sea shipping) Prior to loading, 30 minutes before departure

(Bulk, Transit cargo) Before departure

AIR Import (Principle) At least 4 hours before arrival

(Short haul) Before departure at the airport of loading (more

specifically, at time of “wheels up” of aircraft)

(Express Cargo) At least 1 hour before arrival

Export Prior to loading, 30 minutes before departure

* “Wheels up” is the moment when an airplane’s wheels reach its body after takeoff

The scope of short-haul-flight areas is limited to China, Taiwan, Hong Kong, Japan, and Far-Eastern

Russia. In case of export sea cargo, the Philippines, Vietnam, Cambodia, Thailand, Indonesia,

Malaysia, and Singapore are also regarded as short-sea-shipping areas.

88

Process flow

(a) Import process

Despite the Advance Manifest System introduction announcement made by KCS in 2012, the AMS

has not been implemented to maritime cargo until now. But still current regulation requires

carriers to consolidate House Manifest into Master Manifest and submit them to KCS 24 hours

before arrival of vessel. In the beginning, the purpose of development of MFCS was more on the

cargo control rather than security. So, through the whole customs clearance chain, all the logistics

stakeholders can view cargo information and submit related information or report based on the

shared Manifest information in MFCS inherited from the original information that carriers and

forwarders provided.

E-Manifest filing process:

① The carriers transmit Master Manifest data to MFCS and Forwards submit House

Manifest based on the House Bill of Lading information they received from

overseas partner to MFCS. MFCS consolidate Master and House Manifest

automatically. The carrier must transmit consolidated e-manifest data to KCS 24

hours before vessel arrival for a long-distance cargo while it is before arrival of

vessel for a short distance cargo.

② Based on the Manifest submitted, KCS selects cargo to be inspected. In fact, as received Manifest does not contain as much valuable information as import

declaration for risk management, most of dangerous or suspicious cargo selection

occur after the declaration submission process.

③ Carrier transmit unloading report with unloading place in it to KCS based on Master Manifest.

④ If the cargo is selected at the cargo selection process, after unloading from the

vessel, the cargo is moved to inspection area and inspected

⑤ Once the cargo moves into and out of bonded warehouse, the warehouse reports the cargo carry-in and carry-out with Manifest reference number and Bill of

Lading number.

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Figure 12 e-Manifest filing flow for import to Korea

(b) Export process

Because of the strong government policy for the export promotion, the regulatory control of

export process is very much simplified compared to that of import process. Unlike Manifest filing

process for inbound cargo, in case of outbound cargo, customs export declaration must be

submitted before the outbound Manifest filing. And this difference makes a different point of

cargo selection to be inspected. Export customs declaration can be applied one month before the

loading of cargo and this period can be extended to one year. In practice, sometimes the

declaration is made even before the production of exported item.

Manifest filing process for outbound cargo

① The exporter or authorized customs broker requests export declaration of a cargo and

get an acceptance from KCS.

② Carrier submits electronic Master Manifest to MFCS and Forwarder (or NVOCC) submits electronic House Manifest to MFCS each. The outbound Manifest must

contain the export clearance reference number in it. Electronic Manifest must be

submitted 24 hours before loading for a long-distance cargo and 30 minutes before

loading for a short distance cargo. In case of a bulk cargo and a transshipment cargo,

due time is before departure.

③ The risk management system of KCS validate the information and selects cargoes to

be inspected by utilizing the declaration information of cargoes.

④ If a cargo is selected to be inspected, exporter can notify KCS when the cargo can be inspected. On the day, a cargo shall be moved to a bonded inspection area by exporter

or its authorized agent and KCS conducts physical inspection.

⑤ When all the inspection is over or if no inspection is required, all the subsequent House Manifests are consolidated under one Master Manifest and consolidated

Manifest is filed to KCS system by MFCS.

⑥ Once the Manifest is accepted, carrier load the cargo.

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Figure 13 e-Manifest filing flow for export from Korea

4.6 Mutual Recognition Agreement / Arrangement (MRA)

Overview

MRA was introduced as a tool for trade facilitate the trade, increasing the market accessibility, and

eliminating or reducing the Non-Tariff Barrier (NTB) and often misinterpreted that it may require

to unify Standards or Technical Regulations. Then what is MRA and how does 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. Now, 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.

The most important thing in establishing and maintaining the mutual recognition scheme is how

to manage the trust in the mutual recognition arrangement. The best known worldwide mutual

recognition scheme is Multilateral Recognition Arrangement (MLA) of the International

Accreditation Forum (IAF). The IAF is the world association of conformity assessment Accreditation

Bodies. Its primary function is to develop a single worldwide program of conformity assessment

which reduces risk for business and its customers by assuring them that accredited certificates

91

may be relied upon 13 . The IAF ensures that Accredited Bodies follow the framework of

accreditation and its rules to maintain the consistent level of deliverables. Basic scheme in

maintaining the minimum level of credibility is to use peer evaluation to ISO/IEC 17011: 2004

(General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies) on

Accreditation Bodies and ISO/IEC Guide 65 or ISO 17021-1 2015 (Conformity assessment --

Requirements for bodies providing audit and certification of management systems) on

Certification Bodies which are accredited by Accreditation Bodies. Below figure illustrate how the

multilateral recognition scheme works in conformity assessment across the borders.

Figure 14 General Multilateral Recognition Arrangement of Conformity Assessment

In implementing MRA on conformity assessment, there are two phases; (a) Recognition of

laboratories and its test result and (b) Recognition of certification of recognized laboratories. Most

regulatory transactions have traditionally involved testing and certification of imported product in

the importing country. First phase MRA provides for the mutual recognition of test results, which

allows testing to be done in the exporting country and having it recognized in the importing

country. Second phase provides for the mutual recognition of certification, allowing certification to

be undertaken in the exporting country and having it recognized in the importing country.

13 Certification and Accreditation Framework, Global Food Safety Initiative

92

Figure 15 Comparison of 'Before MRA procedures' and 'After MRA procedures'

Cases of MRA

(a) APEC TEL MRA (Mutual Recognition Arrangement)

In June 1998, the APEC1 Telecommunications and Information Ministers agreed to update APEC-

wide processes for the testing and type-approval of telecommunications equipment. This

landmark Arrangement, the Mutual Recognition Arrangement for Conformity Assessment of

Telecommunications Equipment (APEC TEL MRA14), was the first multilateral agreement of its type

in the world. It reduces a significant barrier to what is projected to be a US$60 billion industry by

2010.15 This Arrangement was expected to streamline the Conformity Assessment Procedures for

telecommunications and telecommunications-related equipment and facilitate trade among the

APEC member economies.

14 http://www.apectel.org

15 A Guide For Conformity Assessment Bodies to the APEC TEL Mutual Recognition Arrangement,

APEC

93

Figure 16 APEC TEL MRA status

94

Figure 17 Sample Test Report issued by Testing

Laboratory accredited by APEC TEL MRA CAB

In case of Korean government, they have entered

into MRA with Canada, Chile and Viet Nam

governments. So, when Korean exporter exports

telecommunications equipment to Canada,

exporter applies for laboratory test at Korean

laboratory institute accredited by Korean

Conformity Assessment Body (CAB) and the

report will be sent to the counterpart laboratory

also accredited by Canadian CAB. The test result

is sent via e-mail, online application of the

Canadian laboratory institute or by courier (the

transmit measures are case sensitive). The

importer in Canada contacts the institute and

applies for certification. The Canadian laboratory

institute review the test result and once confirmed, it issues Certificate to the product. However,

even with the introduction of MRA, the harmonization of the test result and Certificate is far to

realize though most of them are with similar forms.

(b) OECD MAD (Mutual Acceptance of Data)

The OECD Mutual Acceptance of Data (MAD) system is a multilateral agreement among OECD

members on the harmonization of chemical control by reducing duplicative testing. The concept

of MAD was adopted by OCED council in 1981. A further Council Act was adopted in 1989 to

provide assurance that the data are indeed developed in compliance with the Principles of

GLP. This Council Decision-Recommendation on Compliance with GLP establishes procedures for

monitoring GLP compliance through government inspections and study audits as well as a

framework for international liaison among monitoring and data-receiving authorities In 1997,

OECD Council made a decision on the adherence of non-member countries to the Council Acts

related to the Mutual Acceptance of Data in the assessment of chemicals sets out a step-wise

95

procedure for non-OECD countries to take part as full members in this system.16

Figure 18 GLP Certificate

The MAD requires that testing be carried out in

accordance with OECD standards for test methods (OECD

Test Guidelines) and for data quality (OECD Principles of

Good Laboratory Practice - GLP). OECD countries and full

adherent countries - Argentina, Brazil, India, Malaysia,

South Africa and Singapore - have implemented this

system via the appropriate legislative and administrative

procedures. Thailand is currently a provisional adherent

to the MAD system.

(c) Other MRAs

Another well know MRA is IECEE (The IEC System for Conformity Testing and Certification of

Electrical and Electronic Components, Equipment and Product). IECEE Scheme of IEC (International

Electronics Council) is the international system for mutual acceptance of test reports and

certificates dealing with the safety of electrical and electronic components, equipment and

products. There are 60 member countries 22 association member countries under IECEE umbrella.

Initially MRA has been initiated by private sector. ILAC (The International Laboratory Accreditation

Cooperation) is the international body leading the MRA among private laboratories. In APLAC

MRA, 71 laboratories from 58 countries has joined.

Achievement and Limitations

Mutual recognition of Certificates or other regulatory documents provides huge benefits to

16 http://www.oecd.org/chemicalsafety/testing/mutualacceptanceofdatamad.htm

96

traders as well as regulatory bodies as it prevents unnecessary redundancy procedures at

importing side. For example, it is estimated that MAD saves governments and chemical industry

over EUR 150 million every year by allowing the results of a variety of safety tests done on

chemicals and chemical products such as industrial chemicals and pesticides to be shared across

OECD17.

Table 12 Estimated annual costs and savings of the OECD’s EHS Programme

The survey conducted by Dutch Ministry of Trade and Industry tells that simplification of

process can bring more benefits than process automation. The Ministry surveyed traders on

the type of trade facilitation measures that would make a direct impact on their daily

operations. Three of the most common answers related to measures do not require automation.

First, a central enquiry point would increase transparency and anticipation. Second, a move

towards mutual recognition of inspection certificates would greatly facilitate trade, especially

a removal of double SPS inspection procedures. Third, traders (and customs authorities)

would save on administrative work if customs authorities minimised the requirement of

nonstandard documents.18

17 OECD’s Mutual Acceptance of Data (MAD) system, OECD ENVIRONMENT, HEALTH AND SAFETY

BRIEFS

18 THE ROLE OF AUTOMATION IN TRADE FACILITATION”, OECD TRADE POLICY WORKING

PAPERS, NO. 22, OECD PUBLISHING

97

But until now, the online transaction of certificates or test result by MRA is mostly depending

on the capacity of accreditation body and no standardization of the digitized MRA certificates

and test results have been found.

4.7 Cross-Border exchange of e-Certificate of Origin19

Background

Among other cross-border shipping documents, Certificate of Origin has been identified as a key

document to be harmonized and circulated through online system for seamless paperless trade

transactions. And to solve the issues at the international level, various regional or international

cooperation frameworks have been discussed and prepared by international bodies such as UN,

APEC and WCO. For instance, World Chambers Federation set up a Task Force to develop an

International Certificate of Origin Guideline which is including the adaption of electronic

Certificate of Origin20.

Another important approach is the case of APEC. APEC Paperless Trading Subgroup under E-

Commerce Steering Group has initiated several Pathfinder projects, as part of APEC’s Strategies

and Actions towards a Cross-Border Paperless Trading Environment. The Pathfinder projects (and

country who proposed it) of APEC PTS are as below:

o E-Cert SPS (Australia / New Zealand)21

o E- C/O (Singapore)22

19 This case study is adapted from the other study of the author

20 http://www.iccwbo.org/chamber-services/trade-facilitation/certificates-of-origin/co-guidelines/

21 The Australian Quarantine and Inspection Service has forwarded the Japanese Ministries of

Health and Welfare and Agriculture, Forestry and Fisheries annually 38,000 electronic health

certificates for meat exports to Japan (Australian DFAT, 2001).

22 It was estimated that the application and transmission of electronic certificates of origin to

buyers, banks

and the relevant regulatory agencies would reduce the entire process from 4-7 days to just a few

minutes

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o e-Negotiation (Republic of Korea)

Unlike e-SPS whose issuance and final recipient are the same kind of inspection agencies,

Certificate of Origin has difficult changes as it has different stakeholders at its issuing and

receiving sides and this difference makes higher barrier in its implementation across borders.

In Korea, KTNET has been providing EDI based Certificate of Origin service with Korea Chamber of

Commerce and Industry since 2000. But as the C/O need to be submit to Customs in overseas,

the C/O should be delivered in paper form for many years. To make matters worse, some overseas

Customs require authenticated C/O which is being registered and stamped at the embassy in

exporting countries and it has been a setback in establishing a cross-border e-C/O exchange

attempt. In 2004, KTNET proposed e-C/O project to Trade-Van of Chinese Taipei with their web-

based e-C/O system. However, it was impossible to conduct the project without the participation

of both Governments. By utilizing the APEC PTS meeting, they could initiate Private-Public

Partnership Meeting. The Government of both economies come to an agreement to have annual

bilateral meeting for paperless trade with private sectors. In 2005, Korea had its first PPP meeting

with Chinese Taipei and proposed e-C/O project. And a series of Korea and Chinese Taipei Private-

Public Partnership Meeting for Paperless trade was held thereafter. Regular participants are MKE,

Korea Chamber of Commerce and Industry and KTNET from Korea and Bureau of Foreign Trade,

Customs and Trade-Van from Chinese Taipei.

Operation model/arrangement

Both governments agreed on the PAA framework for the secure exchange of e-C/O. MOU on the

exchange of e-C/O was signed by the mission offices of each economy in 2009. In 2010, finally

the first transaction of e-C/O was made from Korea to Chinese Taipei. Now Korean exporters does

not have to visit Chinese Taipei mission office in Seoul or Busan for the certification of paper C/O

any more.

via Internet, and ensure direct savings about SGD 2.9 million per year for Singapore traders (APEC

2002b).

99

Korea-Chinese Taipei e-C/O exchange scenario is as below:

① Korean exporter uses the KTNET uTradeHub (uTH), the Korean Single Window for

paperless trade, to complete the CO application form over the Internet, and send it

KCCI. This online ECO application system is operated by KTNET

② Korean exporter uses the KTNET uTradeHub (uTH), the Korean Single Window for

paperless trade, to complete the CO application form over the Internet, and send it

KCCI. This online ECO application system is operated by KTNET

③ KCCI, as the CO issuing authority, reviews and approves the ECO application using

its own legacy system and sends a confirmation to the Exporter through KTNET.

Exporters can have an access to the ECO database for inquiry according to the ECO

code issued or download the ECO message to its legacy system.

④ The Exporter, sends the approved ECO to the Importer with the uTH of KTNET

which is interconnected with Trade-Van’s online ECO service. Before the ECO is

being delivered to Trade-Van, KTNET signs the approved ECO on behalf of KCCI

and exporter by the PKI mutual recognition framework of Pan Asian e-Commerce

Alliance: an organization for cross-border paperless trade service. It is no longer

necessary for exporters to take the paper CO to the Chinese Taipei Mission Office in

Seoul for authentication, as the digital signature technology provides more than

sufficient assurance to Chinese Taipei Customs on the origin, authenticity and

integrity of the ECO. In the meantime, the goods are being shipped to Chinese Taipei

from Korea, which takes about 3 days

⑤ The ECO system of Chinese Taipei will remind the importer with an email

notification that the ECO has been received from the exporter.

⑥ The importer or customs broker will submit customs import declaration

electronically quoting the relevant electronic e-CO reference.

If necessary, Customs of Taiwan province of China can visit the ECO database website of KCCI for

inquiry. After inquiry and taxation, Customs will grant a release to the goods. A customs broker or

an importer will then arrange to pick up the goods from the terminal or holding area and delivers

them to the importer’s warehouse or required location.

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This service has been renowned as the best practice on paperless trade through APEC. The APEC

Case Study of Electronic Certificate of Origin (e-CO) shows that significant tangible benefits in

terms of costs reductions have been experienced for both importers and exporters from the

application of electronic CO between Chinese Taipei and Korea.

The savings for an exporter includes the following components:

• Time administrative savings of 4 hours 20 minutes (equivalent to US$74 at US$ 17 per

hour);

• Direct expenses saving of US$143.50; and

• Reduction in processing time by two days on the export side of the process.

While the savings for an importer includes the following:

• Time administrative savings of 7 hours 15 minutes (equivalent to US$ 58 at US$ 8 per

hour);

• Direct expenses saving of US$ 147;

• Reduction in processing time by three days on the import side of the process, and time

saved from avoiding the need to send the paper CO to Chinese Taipei.

Now Korea is proposing e-Phyto Certificate exchange project to Taiwan province of China.

And other PAA members such as InterCommerce of Philippines are joining the initiative.

However, despite the success of cross-border e-C/O project, there are limitations and

important lessons to be observed. In the first place, what took the most of its time to realize the

e-C/O exchange was entering into bilateral agreement, not the technical specifications. From its

beginning of the dialogue between two economies, it took almost 5 years to come up with an

MOU.

Secondly, as the e-C/O project was framed with PAA framework, except the e-C/O

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standard document, this model restricts itself within PAA member’s economies.

Lastly, traders need to exchange not only C/O but also other trading documents in electronic

forms to enjoy the true benefit of e-C/O as exporters are still sending the other trading

documents in paper forms. Even if the C/O is a key document, without making all documents in

electronic forms and without covering the whole global supply chain with these electronic forms,

the benefits will be limited.

It seems that currently, it is inevitable for each country to go for bilateral approaches to realize a

mutual recognition of cross-border electronic document and data with the absence of

international framework. As it is proven in many cases that cross-border exchange of trade

documents and data can bring huge benefits in global supply chain, it is necessary to have a

regional or international level of legal framework for the recognition of trade related documents

and data.

4.8 Trade financing service case (SWIFT TSU and BPO)23

Background

Recent globalization of industries has expanded supply chain into a global sourcing and it has

given impact to the payment method of international trade. The portion of T/T and open account

transaction is increasing while the portion of Documentary Credit transaction; so, called traditional

trade transaction, is decreasing. However, the absolute value of traditional trade instruments

continues to grow and they remain a key element of bank service portfolios even though they

represent a falling percentage of global trade. Market demands for individual aspects of

traditional trade services, such as document comparison, discrepancy identification and dispute

management, compliance, foreign exchange hedging, pre and post-shipment financing is still

strong. Frequently, these services require an exchange of data between the buyer’s bank and the

seller’s bank.

23 Most of information are quoted from SWIFT web site (http://www.swift.com) and its publication

102

BPO

On April 17th, the ICC Banking Commission approved the URBPO (Uniform Rules for Bank

Payment Obligation) contractual rules, which will be brought into effect from July 1st 2013. BPO,

as defined by SWIFT and the banking commission of ICC is an irrevocable undertaking given by

one bank to another bank that payment will be made on a specified date after successful

electronic matching of data, generated by SWIFT’s Trade Services Utility (TSU) or any equivalent

Transaction Matching Application, based on Uniform Rules for BPO issued by ICC. Essentially, BPO

is an alternate payment instrument to settle international trade with automated processing and

reduced risk (assurance of payment to the seller). It offers:

• Automated and secure processing

• Standard set of ISO 20022 messages that enable interoperability between participating

banks, thereby helping them extend global market reach

• Straight through Processing (STP): As the ISO 20022 messages are extended to

corporate users, the same can be adopted for communication between Corporates and

their Banks. This message will enable end-to-end straight through processing with

corporate ERP systems.

• An assurance on payment to the seller similar to a confirmed letter of credit, which helps mitigate risk across of the parties of the trade

• Flexible financing options from banks based upon confirmed purchase orders and invoices on pre-shipment and post-shipment finance respectively

Figure 19 Comparison of L/C, BPO and Open Account

TSU

103

The SWIFTNet TSU (Trade Services Utility) is a banking initiative provided by SWIFT

(Society for Worldwide Interbank Financial Telecommunication). TSU compares structured data

from the two primary banks and advises them of inconsistent data. Trade Services Utility (TSU) is a

centralized matching and workflow engine providing timely and accurate comparison of data

taken from underlying corporate purchase agreements and related documents. The TSU supports

banks’ value added supply chain services such as finance programmes, cash forecasting and

liquidity management. The TSU’s work flow can involve one, two, or more banks and it is

designed to allow banks to provide funding at various stages throughout the Physical Supply

Chain. This can be used for LC (Letter of credit) business or Open Account transactions24. The TSU

provides a service that will allow the Financial Supply Chain to mirror the Physical Supply Chain.

The TSU pricing structure includes a monthly fee for all open transactions (POs) being processed

in TSU. So, for one PO handled on TSU for 3 months, the fee would be 1.5 EUR x 3 months = 4.5

EUR charged to both banks involved in the transaction.

Figure 20 Comparison of forfaiting by Normal L/C and TSU/BPO


For a BPO transaction, the bank will be involved in all stages of an open account transaction,

24 Wikipedia

104

starting from the initial baseline submission and it will reduce the overall operational cost

associated with the trade transaction. Banks can also offer value-added services like financing,

cash forecasting, liquidity and working capital management to their corporate clients based on

underlying trade transactions and reporting. Large banks can also offer white label processing

tools for the banks that would not like to build their own BPO processing tool.

BPO can also benefit corporates operationally as there is no manual processing like document

creation, verification, validation, tracking and reporting. It will also result in significant cost savings

for the corporate through:

• Early access to pre and post shipment finance needs

• Risk mitigation, as the undertaking is between buyer and a seller bank.

• No need to reissue the document in case the shipment happens at a different location,

due to external factors such as natural disasters.

• No banking fees on document discrepancy handling and tracking (only if TSU is applied)

• No verification and amendments charges

• Early liquidity/working capital management due to faster transaction processing and

settlement for the exporters

• Importer can access the goods early, as he/she will receive the documents quickly

Figure 21 Mitigation of the payment default or delay by payment assurance

In the first half of 2014 there were 340 new transactions (249 for the first half of 2013). As of July

105

2014, while 58 banks have adopted the BPO including 18 of the top 20 Trade banks and there are

over 30 corporates live on BPO/TSU (including companies like VALE, Omron, BP, and 7Eleven)

volumes are still very small.

Some barriers include banks’ implementation cost and requirements for paper trade documents

by regulatory administrators. Banks that are willing to offer BPO services need to invest in

technology infrastructure/system capable of supporting and communicating with ISO20022

compliant messages as well as the Transaction Matching Application. Else, they may not be able

to provide BPO services to their clients. And paper trade documents are also required to release

of cargoes from customs in most of countries under local legislation.

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4.9 Cross-border paperless trade project directory

Table 13 Cross-border paperless trade project directory

No. Category Processes Documents Project Title Implementation

Period Country Lead Party Participants/users

Project Scope or Area

of /Services

Technical

Assistance Challenges/Lessons

UNLK Cross-border

process

1

Buy Commercial

Transaction

Business

Opportunity

Finding

Offer,

Counter

Offer,

broucher

Korea - Japan e-MP

Project 2001 Korea, Japan

ROK: MOCIE

(MOTIE)

Private e-MPs from ROK

and Japan

Harmonization of e-MP

technical specification

Facilitation of private cross-

border e-MP is beyond

technical harmonization

2

Business

Opportunity

Finding &

Contract

Offer,

Counter

Offer,

Contract

Private B2B e-

Marketplace 2000~ - Private businesses

Businesses and

consumers B2B and B2C Amazon, Alibaba

3

Contract, Order

and production

monitoring, trade

documentation

Delivery

Forecasting,

Order,

Dispatch

Advice, etc.

Private B2B international

supply chain

transactions

1980~ - Private businesses

and VANs Businesses

Electronic commercial

document exchange GM, Chrysler, Bosch,

4

Order and

production

monitoring, trade

documentation

Purchase

Order,

Invoice,

Packing List,

Bill of Lading

Advice, etc.

PAA Secure Cross-

Border Transaction

Service

2001~ PAA Traders and Forwarders Electronic commercial

document exchange

Government sector

cooperation is essential for

the facilitation of cross-

border paperless trade

transactions

PAA.

5 Ship

Transport

and related

services

Loading port

activities

Shipping and

cross-border

transportation

Entry port

activities

IATA e-Freight 2006 IATA

Traders, Airlines,

Forwarders, Customs and

other controlling

agencies

Replace paper with

electronic data and

messages for air

freight

All-in-one concept is hard

to implement at a limited

time frame

http://www.iata.org/whatwedo/cargo/e/efr

eight/Pages/index.aspx

107

6 Export clearance,

Import clearance

Globally Networked

Customs 2012 WCO Customs

Interconnection of

Customs systems

http://www.wcoomd.org/en/topics/facilitat

ion/activities

7 Transit EAC RADDEx 1.0 2007 Revenue Authorities

of EAC and USAID

Traders, forwarders

(brokers) and Customs

Collection of customs

clearance information

Increased efficiencies in

customs clearing processes

through the use of the

system, private sector

shippers are anticipated to

save over US $ 50 million

per year in reduced transit

times at borders. http://www.competeafrica.org/Files/RADD

Ex_2.0_brief_Sept.2012.pdf

8 Transit EAC RADDEx 2.0 2012 Revenue Authorities

of EAC and USAID

Traders, forwarders

(brokers) and Customs

Collection of customs

clearance information

Increased efficiencies in

customs clearing processes

through the use of the

system, private sector

shippers are anticipated to

save over US $ 50 million

per year in reduced transit

times at borders.

9 Transit EAC SCT (Single

Customs Territory) 2014~

Revenue Authorities

of EAC

Traders, forwarders

(brokers) and Customs Transit system for EAC

https://www.trademarkea.com/blog/single

-customs

10 Transit

COMESA Regional

Customs Transit

Guarantee (RCTG)

system

2011

COMESA member

Revenue Authorities

and Customs

Freight forwarders,

clearing agents and

Customs

Regional Customs

Bond Guarantee

Scheme

Implementation of the

RCTG Carnet reduces the

cost of transport and

clearance by between 10

and 15 per cent

http://rctg

11 Transit

SADC Web based Transit

Data Transfer Module;

TDTM

2008

COMESA member

Revenue Authorities

and Customs

COMESA member

Revenue Authorities and

Customs

Extraction of transit

data at the First Point

of Entry and uploads it

into a Web-Server

12 Transit The ASEAN Customs

Transit System (ACTS) 2014 ASEAN

ASEAN traders and

forwards

Development of

regional transit system

The support of EU ASEAN

Regional Integration

Support (ARISE) provided

technical assistance

programme

A MODERN REGIONAL TRANSIT

TRANSPORT SYSTEM: ASEAN CUSTOMS

TRANSIT SYSTEM (ACTS) TO ENSURE AEC

TRADE

108

13 Transit e-TIR 2003 UNECE Customs, holders and

guarantee chains

Development of

international transit

system

It brings additional security

and risk management

opportunities, thus

reducing the risk of fraud.

Advanced international

cooperation will allow all

actors to significantly

reduce their administrative

burden and to maximize

the benefits of integrated

supply chain management.

The provision of advance

cargo information and the

exchange of information in

real time speed up the TIR

procedure.

http://www.unece.org/trans/bcf/etir/welco

me.html

14 Transit

UNDA Project on

Customs-to Customs

(C2C) electronic

information exchange

for transit

2013 UNECE Five pilot countries

Development of a

Customs-to-Customs

(C2C) exchange

platform.

http://www.unece.org/fileadmin/DAM/tran

s/doc/themes/UNDAC2C/Flyer_U

pdf

15

Shipping and

cross-border

transportation

PAA e-AWB 2004 PAA Freight Forwarder and

PAA members

Exchange of electronic

AWB data

Cross-border trade data

and document exchange

are highly correlated with

regulatory requirements

www.paa.net

16 Entry port activity USA AMS 2002 Customs Carriers and NVOCC Advance filing of

Manifest

http://www.cbp.gov/border

entry/c

17 Entry port activity EU ICS 2011 Customs Carriers and NVOCC Advance filing of

Manifest

http://ec.europa.eu/ecip/help/faq/ens7_en.

htm

18 Entry port activity Japan AFR 2014 Customs Carriers and NVOCC Advance filing of

Manifest http://www.naccscenter.com/afr/

109

19

Shipping and

cross-border

transportation

IATA e-Airway Bill 2008 IATA Airlines, NVOCC and

Customs


Airwaybill

Despite the successful

implementation of regional

transit system,

http://www.iata.org/whatwedo/cargo/e/ea

wb/Pages/index.aspx

20

Loading port

activities

Shipping and

cross-border

transportation

Entry port

activities

AIR CCS (Cargo

Community System) - SITA

Airport authority, airlines,

shippers, forwarders and

cargo handlers

To provide a platform

to streamline airline

cargo business

processes and manage

information flow

UK cargo community system (CCS

21 Cargo tracking PAA Cargo Visibility 2007~

China, Korea,

Malaysia,

Taiwan (China)

PAA

22 Cargo tracking NEAL-NET 2010 China, Japan,

Korea

Ministry on

Transport Logistics

of China, Japan and

ROK

Port authorities, ocean

carriers and network

service provider

To interconnect

logistics information

systems

Government sector

cooperation is essential for

the facilitation of cross-

border paperless trade

transactions

http://www.nealnet.org/

23

Official

Control

Origin country Certificate of

Origin

ICC CO Verification

website TBC

China, France,

Netherland,

ROK, UAE,

United

Kingdom

ICC World Chambers

Federation ECO TF

Chamber of Commerce of

China, France,

Netherlands, RoK and

UAE / Traders and

Customs

Provide electronic

Certificate of Origin

Guideline and

Certificate of Origin

verification website

An electronic Certificate of

Origin is a best base of

private public cooperation

for trade facilitation

https://certificates.iccwbo.org/

24 Origin country

Certificate of

Origin,

Response

Message

Korea - Taiwan(China) e-

C/O 2004

Korea, Taiwan

(China)

Korea: MOCIE

(MOTIE)

Taiwan(China):

BOFT, Customs

KTNET and Trade-Van as

an Application and

network provider, traders

and Customs


Certificate of Origin PAA

Government sector

cooperation is essential in

implementing cross-border

paperless trade

25 Origin country

ATIGA Form

D, Response

Message

ASEAN NSW ATIGA

Form D 2010 ASEAN ASEAN NSW

ASEAN National Single

Windows and Customs


ATIGA Form D

Regional/multilateral

approach takes years to

accomplish the goal

http://asw.asean.org/

http://unnext.unescap.org/tools/dhmg

annex4

26 Origin country China - Hong Kong

(China) e-C/O 2004

China, Hong

Kong (China) China Customs

China customs and Hong

Kong (China) customs


origin declaration data

Cross-border exchange of

origin declaration can

facilitate administrative

process

https://www.tid.

annex3.pdf

27 Origin country China - Taiwan (China)

e-C/O 2014

China, Taiwan

(China) China Customs

China customs and

Taiwan (China) customs


origin declaration data




http://www.e

china.com/tariff_changes/Policy_Focus/201

4/0401/112114.html

110

process

28 Origin country

WAEMU Pilot projects to

set up an electronic

certificate of origin

exchange platform in

AFRICA

2014

Senegal, Côte d’Ivoire,

Cameroon and Chad or

the Congo

Exchanges of electronic

Certificates of Origin

http://www.gainde2000.sn/2014/en/news

10.php

http://www.unece.org/fileadmin/DAM/cefa

ct/cf_plenary/plenary14/ECE_TRADE_C_CEF

ACT_

29 Conformity

Certificate

Test

Certificate APLAC (ILAC) MRA 1997 APLAC (ILAC)

National and Regional

third-party organizations

engaged in the

accreditation of

laboratories and/or

inspection bodies, as

designated by their

governments or

otherwise recognized by

APLAC

To harmonize

accreditation practices

in the region and to

extend the APLAC

Mutual Recognition

Arrangement

https://www.aplac.org/aplac_mra.html

30 Conformity

Certificate

Conformity

Certificate

and test data

APEC TEL MRA 1995 APEC TEL

Telecommunication

regulatory bodies of

APEC member states

Mutual acceptance of

test data and/or

Certificate of

Conformity of tele-

communication

products

The APEC TEL MRA

streamlines conformity

assessment procedures for

a wide range of

telecommunications and

telecommunications-related

equipment and facilitates

trade among the APEC

member economies. The

APEC TEL MRA provides

benefits to manufacturers,

CABs, regulators and

consumers.

http://www.apec

Steering

Technical

Groups/Telecommunications

Information/APEC_TEL

31 Conformity

Certificate

Test

Certificate OECD MAD 1981 OECD

OECD member countries,

Argentina, Brazil, India,

Malaysia, South Africa

and Singapore

Mutual acceptance of

test data of chemical

products

Mutual recognition and

acceptance of document

and data could save huge

cost and time for traders

http://www.

g/mutualacceptanceofdatamad.htm

32 Conformity

Certificate IECEE MRA 2008 IECEE

Manufacturers, national

certification body and

testing laboratory

System of Conformity

Assessment Schemes

for Electro-technical

http://www.iecee.org/cbscheme/pdf/iecee

02.pdf

111

Equipment and

Components

33 Quarantine

Phyto-

Sanitary

Certificate

e-Phyto exchange (ROK-

Netherland, China-

Netherland, Kenya-

Netherland)

-

Plant quarantine

agency of China,

Kenya, Netherland

and ROK

Traders and plant

protection agencies


Phyto Certificate




process

34 Quarantine

Phyto-

Sanitary

Certificate

e-Phyto Hub 2013 IPPC

National Plant Protection

Agency of IPPC member

countries

Establishment of e-

Phyto Hub for the

exchange of electronic

Phyto Certificate

International body can play

a leading role in the

harmonization and

facilitation of electronic

trade documents and data

exchange

35 Quarantine

e-Cert (Australia, New

Zealand, USA and

Canada)

2002 Quarantine agencies Traders and Quarantine

agencies


Sanitary and Phyto-

Sanitary Certificate




process

http://www.unece.org/fileadmin/DAM/trad

e/security_conf03/docs/brochure%20info.p

df

36 Quarantine

EU SEED (Systematic

Electronic Exchange of

Data)

2010

The Customs

Administrations of

Albania, Bosnia and

Herzegovina, Kosovo, the

former Yugoslav Republic

of Macedonia,

Montenegro and Serbia.

Development of a

common system and a

regional standard for

the electronic and

automatic exchange of

encrypted pre-arrival

information in “real-

time” between

Beneficiary Customs

Administrations

Cross-border border

management within the

region can reduce security

risks

http://www.eu

seed.net/pages/projectinfo.aspx

37 Customs data

exchange

Asian Region Customs

EDI project 1999

AFACT, Customs of

Malaysia and ROK

Customs of ROK and

Malaysia

Exchange of customs

declaration

data(CUSDEC)

Harmonization of process

and data set is required for

cross-border exchange of

declaration data for the

facilitation of clearance

38 Customs data

exchange

Customs Data Exchange

between ROK –

Malaysia, ROK -Belgium

and ROK - Philippines

2000 ~ 2006,

2007 ~ 2008,

2008 ~ 2009

Customs Customs Exchange of customs

declaration data

Implementation of unique

reference number system is

essential for the utilization

of customs data exchanged

39 Customs data

exchange ASW pilot project

ASW ASW customs

Exchange of ASEAN

Customs Declaration http://asw.asean.org/

112

Document(ACDD)

40

Pay Payment

Trade settlement Letter of

Credit Bolero e-L/C 2005~ Bolero Traders and banks


export, import and

standby Letter of

Credit

http://www.bolero.net/products

41 Trade financing Letter of

Credit

uTradeHub trade

financing 2008~ RoK uTradeHub Traders and its vendors

Exchange of e-L/C and

trade financing

documents

Legal framework played a

core role in facilitating the

paperless trade financing

service

Utradehub.or.kr

42 Trade settlement

& trade financing SWIFT TSU & BPO 2005~ SWIFT Traders

trade financing &

Settlement

New measures for supply

chain financing using ICT is

beneficial to community

but the change of business

practice is a challenge.

Applications for Supply Chain

Management, Trade Services Utility 2.0.2,

Release Lette

http://www.swift.com/assets/corporates/d

ocuments/business_areas/trade_case_study

_vale_bank_of_tokyo_mitsubishi.pdf

43 Trade settlement

& trade financing TradeCard 2000~ TradeCard Traders and its vendors

trade financing &

Settlement





practice is a challenge

http://www.gtnexus.com/

44 Trade settlement

Letter of

Credit, Bill of

Lading,

Invoice,

Packing List

etc.

Bolero e-Presentation 1999 ~ Bolero Traders and banks


document exchange

& trade Settlement






Proprietary technical

standard and high entrance

cost could be a challenge in

introducing a new service.

http://www.bolero.net/products/electronic

-document

45 Trade settlement

Bill of

Lading,

Invoice,

Packing List

and etc

TEDI 2000~ Japan TEDI Club (Trade

and Settlement EDI) Traders and banks


document exchange

& trade Settlement






Proprietary technical

standard and high entrance

cost could be a challenge in

None

113

introducing a new service

46 Trade settlement Private online payment

tool (Paypal, Alipay) 2000~ Private businesses

Businesses and

consumers Online settlement

New payment measures on

the cross-border B2B e-

MarketPlace is popular with

a simplified payment

procedure. But these new

payments are not replacing

traditional off-line

transactions.

Paypal.com and Alipay.com

47 Trade settlement

Letter of

Credit, Bill of

Lading,

Invoice,

Packing List

and etc

uTradeHub e-Nego

service 2008~ RoK utradehub Traders and Banks

Electronic presentation

of trade document and

trade financing

Realization of cross-border

trade settlement can’t be

achieved by one paperless

trade platform of one

country.

https://www.utradehub.or.kr/

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