UN Centre for e-Business

UNITEDNATIONS CEFACTSIMPLE, TRANSPARENT & EFFECTIVE PROCESSES FOR GLOBAL BUSINESS

10th UN/CEFACT Forum, Dublin, IrelandHosted by CP3 Group

10th UN/CEFACT Forum, Dublin, IrelandHosted by CP3 Group

IRELANDThe Gateway for Transatlantic Business

IRELANDThe Gateway for Transatlantic Business

UNITEDNATIONS CEFACTSIMPLE, TRANSPARENT & EFFECTIVE PROCESSES FOR GLOBAL BUSINESS

Trade FacilitationGlobal Standards which

Save Time, Save Money &Increase Competitiveness

Trade FacilitationGlobal Standards which

Save Time, Save Money &Increase Competitiveness

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FACILITATING INTERNATIONAL TRADE 1

CONTENTS

The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT): an overview 2

Forfás How Trade Facilitation Will Influence Irish Policy Going Forward 8

CP3 Group - Facilitating Trade 10

Chambers Ireland Supports Trade Facilitation and Welcomes UN/CEFACT 14

Irish Customs Positive on Trade Facilitation 16

Irish Exporters AssociationBenefits of Trade Facilitation to Irish Exports 18

Waterford at the Forefront of Economic Development 20

Transatlantic Business DialogueTowards a Barrier Free Transatlantic Market 22

IMDO - Irish Marine Development Organisation 24

IIFA - Trade Facilitation and the Freight Forwarder 27

NITL - What the Transport and Logistics Industry Needs Going Forward 29

Banking and the Electronic Supply Chain 32

LCAC Trade Services Limited 34

Microsoft in Ireland - A World Class Location for a World Class Company 36

Diageo Ireland and its Global Success 38

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THURSDAY FINAL 21/03/2007 15:00 Page 1

THE UNITED NATIONS CENTRE FOR TRADE FACILITATION ANDELECTRONIC BUSINESS (UN/CEFACT)

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1. TRADE FACILITATION1

IS APREREQUISITE TOINTERNATIONAL TRADE.Business, trade operators andGovernments generate informationas part of the processes associatedwith the movement of goods, thetransfer of services and relatedfinancial flows. Nationalregulatory authorities amend oradd formalities in some caseswithout consideration of the effectsuch changes may have on theoverall trading system. This caneasily lead to incompatible orinefficient regulations, informationrequests and controls.Furthermore, the use of non-standard, country-specific, andagency-specific data is inefficient asregards to the internationalexchange of information amongtrading partners. It increases boththe risk of error and costs for bothGovernments and trade

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The frequent consequence is congestion at airports,seaports and inland surface terminals. This generatesadditional costs, estimated at 2-4 per cent of the totalvalue of world trade. These costs further discourage smalland medium-sized enterprises (SMEs) from consideringtrading internationally.

New challenges are emerging for companies operating ininternational trade. These include the requests for advanceinformation imposed by security authorities and theincreasing complexity and geographic extension ofinternational supply chains

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1 Trade Facilitation: The simplification, standardisation and harmonisation of procedures and associated information flows required tomove goods from seller to buyer and to make payments.

2 There are in an average trade transaction between 27 and 30 different parties involved, handling approximately 40 documents, notonly for government authorities but also for related businesses. 200 data elements are required, 30 of which are repeated at least 30times (APEC (1996)), of which 60-70 per cent are re-entered at least once (ETPAD (1998)). In addition these costs may be multipliedby data-entry errors incurred during the process (SITPRO (1991)). Similarly, Messerlin and Zarrouk (1999), p. 12 find that the averagecustoms clearance transaction in the Middle East and North Africa takes between 25 and 30 stages to complete and takes between 1day to several weeks, with border corruption being evident in the process too.

3 Customs procedures are only one aspect of improving the overall efficiency of the cargo clearance process. APEC (2000) cites a WorldCustoms Organisation (WCO) study of clearance times at Indonesian ports, which found that the Customs clearance process forcertain shipments took an average of 6.4 minutes, compared to 159 hours and 23 minutes for other activities involved in cargoclearance, including problems with incomplete documents, red tape involved in releasing goods from warehouses, and payment hold-ups even after the release of goods by Customs officials. Mikuriya (2001) shows that the biggest delay from cargo arrival to release isin the plane-to-warehouse and time-in-warehouse stages of the process.


Trade facilitation aims at eliminatingredundancies in international trade andtransport data that needs to be submitted toauthorities. Furthermore, it seeks to simplifyinternational trade and business processes

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as ordering goods or payments.

2. INTERNATIONAL STANDARDS5

HOLDMANY ANSWERS TO GLOBAL TRADE ISSUESFacilitating trade through conventional measures, such asthe reduction of tariffs, has been achieved over the yearsby the World Trade Organisation (WTO). Further gains ininternational trade can be obtained by addressing non-tariff barriers to trade.

International standards influence all stages ofthe international supply chain

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order placing and fulfilment, transport, disposal andrecycling. Unclear or insufficient information can cause avariety of problems within supply-chain networks. Thestandardisation of information exchange improves thequality of the information and speeds up trade.

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4 Business: A series of processes, each having a clearly understood purpose, involving more than one Organisation, realised through theexchange of information and directed towards some mutually agreed upon goal, extending over a period of time.

5 Standards: A document, established by consensus and approved by a recognized body, that provides, for common and repeated use,guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context.

6 Supply chains: The "supply chain" is a multi-level concept that covers all aspects of taking a product from raw materials to a finalproduct to shipping to a final place of sale, use and maintenance and potentially disposal and returned goods. Each of these levelscovers many aspects of dealing with products and the business process for each level is both unique and overlapping with other levels.

2.1 Standards developed by consensus among tradingpartners serve as a lingua franca for tradeOne example of this lingua franca is the UN/EDIFACTstandard for electronic commerce. This UN/CEFACTstandard ensures that all participants can reallycommunicate and understand each other electronically.The use of UN/EDIFACT by the bar-code communitygrew by 59 per cent during 1997 and 1998 and theUN/EDIFACT messages are translated into 21 languages.

3. UN/CEFACT

3.1 The role of the United NationsWhen simplified and standardised export documents wereintroduced in Sweden in 1957, it was felt that this initiativewould be of real value only if the high-level of cooperationbetween the Nordic countries could be extended to covertrade in general at an international level. Attemptstherefore were made to find an international body thatcould assume responsibility for a real international effort.

One of the first international bodies to be approached wasthe International Organisation for standardisation (ISO).However, it turned out that ISO at that time was notengaged in administrative standardisation and had neither


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the mandate nor the resources to carry out a task thatessentially involved negotiations regarding national legalrequirements and international trading practices.Having considered all available options, Sweden, supportedby the other Nordic countries brought the matter beforethe UNECE in 1960, where it was agreed to set up aWorking Party to study this issue. Initially restricted totrade document standardisation, it was later mandated todeal with trade facilitation in general. The Working Partyis the “ancestor” of UN/CEFACT.

3.1 About us

The primary objective of UN/CEFACT is toinitiate simple, effective, transparent processesfor international trade, thereby making theactivities between the buyer, seller and relevantauthorities more efficient, cost-effective andsupportive of automation.

3.2 Our activitiesWe concentrate on the following key work areas:• Facilitating national and international trading and

business transactions and working towards theelimination of constraints,

• Engaging in open dialogue to achieve improvedcoordination and cooperation with other organisations, and

• Improving the ability of business, trade andadministrative organisations to exchange products andrelevant services effectively.

3.3 How we workTo accomplish these goals, UN/CEFACT develops andmaintains recommendations, standards and technicalspecifications that are time and cost-saving tools forcompanies, Customs authorities, and other actors in globalbusiness

7. In doing so, we:

• Apply a total transaction approach when working forthe elimination of constraints;

• Simplify procedures and documents, encompassing bothborder-crossing and other government and commercialprocesses;

• Capture business knowledge in process and informationmodels;

• Map the information models to new information andcommunication technologies as they emerge.

4. THE NEW FRONTIER OF TRADEFACILITATION

Supply chains link producers with consumers. Some are confinedby national borders, others span several continents. Productsthat we buy off the shelf in department stores have oftenmade long journeys, using different transport modes, andhave crossed a number of national borders. These “journeys”have become increasingly complex over the past decades.

In the early 1990s firms moved toward more integration,improved data management, more complex relationshipsand increased material flows across borders. Thedevelopment of the Internet reinforced the integrationthrough the automated management of associated businessprocesses. These modern supply chains blur the distinctionbetween trade facilitation and electronic business

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4.1 UN/CEFACT's answer: end-to-end interoperability9

from the buyer to the sellerAgainst this background, it is important that all traders andgovernment agencies have a precise and common understandingof the business processes, data requirements and data formats.

This requires the use of a common methodology and set ofstandards to achieve the end-to-end integration of businessprocesses and data.

To assist in analysing and understanding businessprocesses, UN/CEFACT has developed a Reference Modelof the International Supply Chain.

The model can be represented by threeprocesses: "Buy", "Ship" and "Pay".

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7UN/CEFACT Consolidated Documents Set (ECE/TRADE/CEFACT/2006/10) http://www.unece.org/cefact/cf_docs.htm

8 Electronic Business: A generic term covering information definition and exchange requirements within and between enterprises,including customers. (Memorandum of Understanding between IEC, ISO, ITU and UNECE concerning standardisation in the field ofElectronic Business)

9The seamless automatic cooperation amongst computer systems between a buyer and a seller

Figure 2: International Trade Transaction Model


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10http://www.ebxml.org/geninfo.htm

11United Nations electronic Trade Documents

12 http://www.cen.eu/uncefactforum/TBG/TBG2/tbg2_unedocs.htm

13Recommendation No. 1 on the UN layout Key for Trade Documents

Based on this approach, UN/CEFACT is developing thenext generation of trade facilitation standards for theInternet. They will improve international trade processesfor commerce by enabling:• Buyers, sellers and relevant authorities to use processes

that are simple, cost-effective and support automation;• Border-crossing procedures and other government,

commercial and transport processes that are transparentand effective, reducing as much as possible unforeseenor undue delays or unexpected additional costs;

• The greatest possible security during the physicalmovement of goods by the fast and efficient sharing ofrelated information; and

• Off-the-shelf software solutions using UN/CEFACTstandards and recommendations to automatetransactions and the flow of information.

4.2 The business relevance of technology Internet technologies and Extended Markup Language(XML) allow for developing new models of trading and

cooperation between business partners. The ebXML10

project launched by UN/CEFACT in 2001 introduced thetechnique of Core Components (CC) which provide asyntax neutral way to describe both processes and data.

Three important projects based on thisadvanced methodology are the Cross-BorderReference Data Model (CBRDM), UNeDocs

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and Single Window.

4.2.1 The digital container – The Cross-Border ReferenceData Model The CBRDM acts like a container of data associated to thegoods for efficient cross-border trade. It provides the definitionof the information required by the transport sector andregulatory bodies such as Customs to clear the goods. It isan important instrument to simplify and harmonise datarequirements between countries and industry sectors.Countries can define their specific, national data requirementsand map the national data requirements against the referencedata model. The common subset of data requirements inthe cross border reference data model defines the completeinformation requirements for trade between these countries.This data model will include the data requirements for thebusiness to Government and Government-to-Governmentprocesses in an international transaction.

4.2.2 From paper to paperless trade - the UNeDocs12

standardToday UN/CEFACT paper trade document standards areused worldwide. However in the 1990s it became clearthat electronic business standards did not replace theexisting paper based documents.

The goal of UNeDocs is to provide a seamlesstransition from paper to electronic documents.This is achieved by combining the existing tradedocuments standards for paper documents

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with data modelling techniques, CoreComponents and XML. The resulting electronicdocument can be used in either paper orelectronic form.


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4.2.3 Single Window14

- enhancing the efficient exchangeof information between trade and GovernmentThe Single Window for International Trade allows partiesinvolved in trade and transport to lodge standardisedinformation and documents with a single entry point tofulfil all import-export and transit-related regulatoryrequirements

15. If information is electronic, then individual

data elements should only be submitted once.

Establishing a Single Window facility can simplifyand expedite information flows between tradeand Government. It can also bring aboutgreater harmonisation and better sharing of therelevant data across governmental systems,bringing meaningful gains to all parties involvedin cross-border trade. It can improve theefficiency and effectiveness of official controlsand reduce costs both for Governments and fortraders because of better use of resources.

UN/CEFACT’s Recommendation and Guidelines onEstablishing a Single Window (Recommendation Number33) details the key principles and steps required toestablish a Single Window facility. 14

http://www.unece.org/cefact/single_window/welcome.htm15Recommendation and Guidelines on Establishing a Single Window, ECE/TRADE/352, September 2004,

http://www.unece.org/cefact/recommendations/rec33/rec33_trd352e.pdf

5. TWO CASE STUDIES OF BENEFITS OFTRADE FACILITATION

5.1 Developing countriesOne constraint to export expansion in developing countries isthe role of trade transactions costs or the issue of trade facilitation.

Transaction costs associated with international trade ingoods are numerous. They cover costs of complianceassociated with the collection and processing ofinformation and charges for trade-related services.Increased transport and logistics costs are brought aboutby administrative processes and customs procedures,which delay goods in the warehouse. Other costs can bebrought about by a lack of transparency or of uniformityin the interpretation of regulations and contracts.

Finally, a category of transaction costs includes thoserelated to standards. As technological advances helpdeveloped countries improve their inspection capacitiesdeveloping countries are beginning to face more stringentstandards requirements in industrialised markets.Developing countries have fewer resources to advance asquickly, and the costs for compliance seem to be increasing.


resources with which to tackle poverty; and• By improvements in infrastructure.

5.2 Landlocked countriesThe difficulties encountered by business from landlockedcountries stem not from their distance to the final markets,but from the number of border-crossing processes thatneed to be managed.

When transit countries introduce new measures withoutconsulting or informing their regional partners, tradersincur fines and experience delays. In some cases thereshipments are sent back to their point of departure.Especially perishable goods shipments risk being entirelylost in a transit process.

Corrupt Customs services can have an extraordinarilypernicious effect for landlocked country trade. Fully 46 percent of the price of shipping a container from Rotterdamto the Georgian capital Tbilisi comes with the transitthrough Georgia itself. Of this, unofficial payments makeup to nine-tenths.

For these reasons, the cost of trade is significantly higherin landlocked countries (it costs respectively 66 per centand 43 per cent more to trade from Paraguay than fromother MERCOSUR countries with access to the sea).

It is tempting to think that formal trade policy can addressthe issue. However, the “spaghetti bowl” of interlockingbilateral and regional trade agreements between thedifferent countries is costly and confusing.

A WTO agreement on trade facilitation is therefore neededfor further integration of landlocked countries ininternational trade. To achieve its objective, such anagreement should be binding on Customs clearance timebenchmarks. The TIR convention and the UN/CEFACTtrade document standards are key instruments to this end.They allow simplifying and coordinating administrativeprocedures at border crossings.

Nevertheless, such an agreement would need to becomplemented by behind the “border reforms” andregional initiatives, such as regional facilitated transportcorridors, simpler border control documents, and singlewindow initiatives.

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The effects for developing countries of trade transactionscosts can be categorised as follows:• Effects on SMEs and, therefore, on enterprises in

developing countries;• A high demand for labour to complete complicated procedures;• Effects on the capital standing of firms due to the long

processing; and • Lack of predictability that entails significant

disadvantages for enterprises in developing.

Trade facilitation measures can benefit income distributionand poverty reduction in developing countries in a numberof ways:• By changing the prices of traded goods;• By the need to be accompanied in areas such as

transport and communications infrastructure; and• By increasing government revenue, boosting social and

anti-poverty programme expenditures.

The benefits and resulting growth can be achieved:• When trade facilitation measures are implemented by a

wider range of policies falling under the tradefacilitation agenda – including the level and variabilityof non-tariff barriers, effective infrastructure, level ofinternational competitiveness, degree of statemonopolies, etc.;

• Through reducing trade transaction costs that can lowerthe price of imports and import substitutes, and raise theprice of exports and exportables;

• By trade-induced growth, which increases averageincomes and government revenue, providing more


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The effectiveness and quality ofregulation and the institutions thatenforce them are majordeterminants of a country’sprosperity. The problem of theexcessive administrative burden onfirms is one that has been raised bya number of bodies, most notablythe National CompetitivenessCouncil and the Small BusinessForum. Well-designed andefficiently enforced businessregulation helps achieve social,health and safety, environmentaland economic policy goals withoutimposing unnecessaryadministrative costs on firms orsignificant hidden costs, wherebythe ability of firms to adapt tochanging economic conditions,technologies and consumerpreferences is weakened.

Ireland continues to be one of the most open economies inthe world to international trade and investment. Theregulatory environment has played a key role in thedevelopment of Ireland’s international competitiveness.According to the National Competitiveness Council’s

Benchmarking Ireland’s Performance, the regulatoryburden in Ireland is perceived as being relatively low.However, Ireland’s advantages in these areas areincreasingly coming under pressure as many countries arerecognising that the development of an efficient regulatoryenvironment is an effective way of boostingcompetitiveness, and in November 2006, the EuropeanCommission proposed that the EU agree to reduceadministrative costs by 25% at both EU and member statelevel by 2012. Accordingly, further improvements inIreland’s regulatory regime will continue to be needed,while ensuring that this is done without undermining highstandards of protecting public security, health and otherregulatory goals.

HOW TRADE FACILITATION WILL INFLUENCEIRISH POLICY GOING FORWARDDr. Ronnie O’Toole, Senior Policy Analyst, Forfás

Indicator Year Group Ranking ChangeLevel of Regulation 2005 OECD 4 ( 1)Labour Market Regulation 2006 OECD 12 ( 3)Product Market Regulation 2003 OECD 5 ( 2)Hours per year for filing corporation tax 2005 OECD 3 (new)Administrative Costs 2005 EU-25 5 (new)Cost of starting a business 2005 OECD 14 (new)

1=best; = improvement; = deterioration;Source: National Competitiveness Council’s Competitiveness Challenge 2006.

Dr. Ronnie O’Toole, Senior Policy Analyst


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The burden of regulatory compliance is not spreadproportionately across companies of different sizes. SeveralUK studies have demonstrated that average compliancecosts fall as business size increases, and that thedisproportionate cost of compliance is the primary issueaffecting small business. It is estimated that smallbusinesses in the UK with two employees spend over sixhours per month per employee on Government regulationand paperwork, while those with over 50 employees spendless than two hours per employee.

The act of exporting or importing is one area where thereis a substantial regulatory burden. Companies involved ininternational trade regularly have to prepare and submitlarge volumes of information and documents togovernmental authorities to comply with import, exportand transit-related regulatory requirements. Thisinformation and documentation often has to be submittedthrough several different agencies, each with their ownspecific (manual or automated) systems and paper forms.These extensive requirements, together with theirassociated compliance costs, can constitute a seriousburden to both the business community and governmentsand can also be a serious barrier to the development ofinternational trade.

For example, an exporter from Ireland must comply withall the regulatory requirements of the Customs bodies ofboth Ireland and their destination countries, includingrevenue collection, protection and security issues. Further,many other governmental agencies can be involved,whether in Ireland or in other countries. For example, theDepartment of Enterprise Trade and Employment ismandated to manage the licensing system for dual usemilitary/civilian goods, while the Department ofAgriculture ensures food safety.

Further, the act of exporting or importing requires farmore procedures than simply dealing with government.Apart from the communication between the buyers andsellers, a number of service providers are also involved.

Most of the data required for each is common.Service providers include packers, freightforwarders, carriers, customs brokers, hauliers,Chambers of Commerce, and banks and otherfinancial institutions.

The data required by these private sector service providersoverlaps the requirements of the regulatory authorities to asignificant extent. As such, much of the work involved is

duplicated, and unnecessary. Costs are not only in directmonetary terms, but also arise from the effect of timedelays and other uncertainties which may complicate theprocess of trade. Further, there can be substantialimplications of ‘getting data wrong’. If a firm only has toenter data once, they can take care to do it properly, andgreatly reduce the risks of incorrect data.

This weight of regulation and bureaucracy islikely to increase in the coming years given thenew security environment with its emphasis onadvance information and risk analysis. Thisdrive for greater security is being led primarilyby the U.S., though the U.K. is also at theforefront of introducing measures in this area.These two markets account for two-thirds of allIrish exports, and our continued success inthem is critical to our future economicprosperity.

One approach that has been adopted to address thisproblem by a number of countries and regions throughoutthe world is the establishment of a Single Windowwhereby trade related information and/or documents needonly be submitted once at a single entry point. This canenhance the availability and handling of information,expedite and simplify information flows and can result in agreater harmonisation and sharing of the relevant dataacross governmental systems, bringing meaningful gains toall parties involved in cross-border trade.

The successful development, implementationand adoption of Single Window services willyield massive annual savings due to use ofelectronic over paper based systems and greaterpotential for security and control of goodsmovements between and through states andcountries.

The benefits for government include a more effective andefficient deployment of resources; correct (and oftenincreased) revenue yield; improved trader compliance;enhanced security; and increased integrity andtransparency.

There is already work ongoing in this area at the EUcommission, and the Irish customs is an active participantin these discussions. Trade Facilitation Ireland can providea bridge between government and industry to ensure thatthe full potential benefits of a Single Window for Irelandare realised.


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CP3 Group, the host of the UnitedNation CEFACT Forum in Dublin,is an Irish company committed tofacilitating international trade withon-demand software services thatare focused on assisting small tomedium-sized enterprises engagedin international trade.

CP3 Group are the consortium leader on an EU-funded,pan-European project to facilitate trade for SMEs. The fiveEuropean Countries participating in this EU programmewill see massive benefit derived from the fact that CP3have taken that initiative across the Atlantic – connectingwith the world’s largest economy, the United States.

Managing Director, Conor O’Riordan explains therationale behind the CP3’s mission,

CP3 GROUP - FACILITATING TRADE

Conor O’Riordan, Managing Director of CP3 Group


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“9/11 changed everything. After that defining moment, itwas made clear that the need to balance the competinginfluences of trade facilitation and trade security wouldcome to the top of the agenda.”

“The US led the way with C-TPAT (Customs-Trade Partnership Against Terrorism) and theWorld Customs Organisation and the EUfollowed with the AEO (Authorised EconomicOperator) programme. The EU has clearlydefined implementation dates on the newregulation for its states. In addition the EU hasalso clearly mandated that it expects the privatesector to lead with solutions that will actuallyincrease competitiveness.”

“Ultimately, these changes to the regulatory framework(under the WCO SAFE framework) will mean fastershipping times for companies which gone through thecertification process.”

“However, Forbes magazine forecasted in 2005that the major losers globally in this AEOprogramme will be the small and medium-sizedenterprises and developing countries that cannotmeet the cost of these new legislativerequirements.”

“We are therefore committed to bringing all of theinterested parties together internationally to make surethat these changes that are being made to the regulatoryframework will result in considerable gains incompetitiveness to all participants. The adoption ofUNCEFACT standards can provide that capability. At alocal level, Trade Facilitation Ireland was formed toembrace these standards. From an EU-US perspective, weare committed to adopting UNCEFACT standards in theTransatlantic initiative that we are leading,www.TradeFacilitate.com”

The transatlantic initiative will bring representative organisationsin the US and EU together on a platform for electronic trade.This will deliver reduced costs to SME companies based onobjectives defined by two major Transatlantic studies.

One study from the Transatlantic Business Dialogue (2004),the other, a combined study between Eurochambres andthe US Chamber of Commerce (2005) identified that

Key priorities were;

- to minimise costs to industry- to prevent barriers to commerce- to mitigate risk, &- to facilitate bilateral & global trade.


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Both studies mapped out the necessary steps transatlantictrade should take to facilitate open trade.

According to the TABD,

“Supply chain security in the Transatlantic context,through the incorporation of ‘Authorised EconomicOperator’ (AEO) would allow unimpeded trade flows andby the US and EU working together to support thedevelopment and implementation of analogous efforts atinternational level through the World CustomsOrganisation.”

The TABD study expressly called for the US & the EU to,

“Initiate a joint US-EU pilot project focusingon express carriers and other shippers, forcustoms authorities to analyse risk attached tocargos and shipments to third countries, exchangeinformation on the results of this analysis, andpromote cooperation on enforcement.”

The combined Eurochambres/US Chamber of Commercesurvey of mostly small to medium-sized enterprise foundthat 55% of companies had a difficulty in their ability tofind local partners across the Atlantic, 54% thought thatthey needed to know more about technical standards andcertification, 48% needed more information regardingdoing business in transatlantic markets and 34% had adeficit of knowledge regarding customs procedures.

The progress demanded from these studies arethe cornerstones on which CP3 has built anonline platform which will enable traders tosave time, save money and increasecompetitiveness through secure electronic tradebuilt to UNCEFACT standards.

According to Elisabet Canestro, International MarketingManager,

“The EU expects the private sector to lead with solutionsin this area, so CP3 see it as logical that the positive UScapabilities/experiences to date are fused to any initiativesso as to maximize the opportunity for secure, competitivetransatlantic trade for SMEs upwards. A successful transatlanticmodel would be then portable and benefit developing economies.”

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Elisabet Canestro, International Marketing Manager of CP3


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Ireland and the Irish Chambermovement understand the need fortrade. In the period from 1930 to1958 we erected high tariff barriersand focussed almost exclusively onour internal Irish market. It was arecipe for ruin from which we havelearned crucial lessons. Tradecreates wealth, opportunities andtaxes from which all of societybenefits. Post 1958 Ireland progressively reduced tariff barriersand actively embraced what is nowcalled the Globalisation agenda.

Our recent economic success has been built upon Irelandas open trading economy that is consistently recognised asone of the most globalised in the World.

It is in this context that we welcome the arrival of theUN’s Centre for Trade Facilitation and Electronic Business(CEFACT) Forum in Dublin in 2007.

CHAMBERS IRELAND SUPPORTS TRADEFACILITATION AND WELCOMESUN/CEFACTConor Brennan - Deputy Chief Executive of Chambers Ireland

Following the September 11th terrorist attacks in New York,global security concerns increased along with a desire forenhanced traceabilility on import and export documentation.

A new era beckons of more complex customs regulationfollowing on the enhanced security requirements andlegislation demanded by Governments around the Globe.

Chambers Ireland are involved in a range of initiativesaimed at sensitising Irish companies to the implications ofthese changes and also helping them to embrace and dealwith these new requirements.

Chambers Ireland are a partner at TradeFacilitation Ireland which has UN/CEFACTrepresentation and voting status. Chambers arealso partners with the hosts of theUN/CEFACT forum, CP3 Group, who, alongwith LGCSB are supporting a Transatlanticinitiative which will provide Ireland with acompetitive trading platform with the US.Through adopting UN/CEFACT and EUguidelines, CP3 have also established a pan-EU“eTen” project for Irish SMEs which willenhance the competitiveness of its users.

The Chambers Business School, which is now Ireland’s largestprivate sector facilitator of training, will offer a range of

Conor Brennan


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training courses for business in Ireland that will prepare themfor the reporting requirements demanded by this new era. Our network of 60 affiliated chambers on the island ofIreland will become key repositories of knowledge on thisissue and will be able to process and route business querieson these issue to relevant subject matter experts.

It is in this context that we are particularly proud to beassociated with the UN/CEFACT forum, which is beinghosted by our partners, CP3 Group.

We believe that the presence of the forum here in Ireland canfurther sensitise businesses both in Ireland and internationallyon the challenge of providing enhanced traceability and security.

We note that the world customs organisation has nowimplemented legislation that specifically ensures thatimported and exported goods are validated.

We in Chambers Ireland are very much aware of theimplications of these changes—national customsorganisations are now responsible for both collecting taxesand significantly enhanced border security.

Yet business will have to overcome some significant redtape arising from these changes. As members of a smallopen economy that, by necessity, must export if it is tocontinue to grow, Irish business must deal with differentbureaucratic regimes and paper based systems as it dealswith each new international market and, by extension,new customs authorities.

While we are strong supporters of EU plans tohave a single electronic European trading ‘window’by 2012, we fear that if these processes are notoptimised by this date, then there is everyprospect of a two-tier trading system buildingup in which some companies’ papers arespeedily processed while others languish.

It is clear that a paperless transparent system could meansignificant savings for Irish importers and exporters.

We support the contention that if an optimisedtrade facilitation regime was introduced intoIreland then we could actually be looking at asaving up to a billion euro in previously sunkenadministration and processing costs.

Extrapolated for the World and truly enormous sums ofmoney could be saved for investment in more productiveareas that would enhance both wealth and the quality of life.

We support the contention that if an optimised trade facilitation regime was introduced intoIreland then we could actually be looking at asaving up to a billion euro in previously sunkenadministration and processing costs.

This is why we believe that CEFACT can play such a crucial role in liberating both Irish and international businesses from this significant cost burden.

We support CEFACT’s mission to improve business, trade and administrative organisations from all types ofeconomies around the World.

Finally, Chambers Ireland recognises the strategicimportance of trade as one of the great builders ofeconomies, societies and most importantly of peace.

Across history the great trading societies—and thosesocieties that traded with each other—have always soughtto maintain peace in favour of mutually beneficial andwealth creating trade.

We believe that CEFACT has a vital role in the ongoing Globaleffort to develop international e-business standards that can• Reduce costs• Simplify the flow of data• Decrease bureaucracy • Enhance security, and crucially • Generate trade and wealth creating activities that all

citizens and businesses in our respective societies canbenefit from.

We are involved with and participate in UN/CEFACT policydevelopment via our nominees on the International Chambersof Commerce. We are proud of their efforts as board membersof UN/CEFACT. We greatly value their contribution asour representatives on UN/CEFACT’s deliberations.

We recognise the huge opportunity for Ireland, and theWorld from your deliberations.

We look forward to a successful outcome fromUN/CEFACT’s meeting here in Ireland, we welcome youand wish you a pleasant stay here.


IRISH CUSTOMS POSITIVE ONTRADE FACILITATION

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Revenue Commissioner, JosephineFeehily, talks exclusively to C.E.O.Financial about the strong historyof trade facilitation at IrishCustoms, and what the future hasin store from a Customsperspective.

“The first thing to note”, explains the Director General “isthat Irish Customs is and always has been, very positivewith regard to trade facilitation. I think that privatebusiness would agree with us on this point. We have awhole host of simplified procedures in place in order tomake sure that legitimate trade is facilitated to the fullestextent. For example, there are very few Single EuropeanAuthorisations in place and I am particularly proud of thefact that we have one in Ireland.”

“With regard to entry processing, we began our paperlesssystem in 1992 and have been effectively paperless since1996. Our current figures show that 98% of imports arefiled in a paperless manner, while 90% of exports are filedin this way.”

“We see ourselves as a key partner with Irish business dueto our strong history of facilitation of trade.”

Ms Feehily provides Ireland’s importers and exporters withan encouraging message regarding the upcoming changesin the regulatory framework.

“There are new regulations coming into play, but I would be concerned if the trade looked at these as aproblem for competitiveness. I realise that the initialimplementation of the various regulations will entailchange for business and some cost, which we will do ourbest to minimise, but I see the suite of regulations asessential to maintaining the competitiveness of Europeantrade on the global stage.”

“From Revenue’s point of view, we are doing our best totake account of future needs in the context of the currentproject to replace our AEP (Automated Entry Process)system.”

Michael Gilligan of the AEP Redevelopment Teamexpands on this point:

“While the EU regulation on the new SingleAdministrative Document was the driver behind thedevelopment of AEP II, in developing the systemwe have built in the flexibility necessary to allowus to accommodate some of the future developmentswhich are on the EU e-customs agenda.”

“Over the last number of years the trade have lobbied fordirect transmission facilities in relation to the submissionof customs declarations. We have accommodated thetrade in this respect and are introducing the use of webservices for the transmission of such declarations. Thesedeclarations will now be submitted to Revenue throughthe ROS (Revenue Online Service) gateway. We areworking with all the stakeholders in the supply chainindustry and through programmes such as the TraderAssistance Programme which has been introduced to assisttraders in moving to the new Custom entry processingsystem. We are working with large and small businesseswith a view to ensuring business as usual on theintroduction of these significant EU projects. We don’twant to leave anybody behind.”

Josephine Feehily, Revenue Commissioner & Director General ofIrish Customs


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Ms Feehily outlines Irish Customs’ involvement in theAuthorised Economic Operator (AEO) programme, theinitial submissions of which, start this year.

“During the Irish presidency of the European Union in2004, I hosted a meeting of the director generals of EUcustoms. Very high on the agenda was the balancing of thecompeting interests of security and trade facilitation. Theculmination of this meeting set the direction for theadoption of the AEO programme by the EU.”

“Although the AEO programme is potentiallyonerous on traders, we will make every effort tomitigate the effect of these requirements. Thefact is that 9/11 happened, and because of that,countries are taking increased security measuresto ensure that they properly monitor everythingthat comes into their space. Without AEO, thiswould be difficult for Irish and Europeanbusiness. In actual fact, AEO is the solution tothe problem. Ultimately, these new regulationswon’t delay trading – they will facilitate itwithin a security context.”

“We are currently running our initial AEO pilotprogramme with six companies spanning the gamut fromSME to multinational. We will learn lessons from this

period, so that we can refine our processes and proceduresin advance of January 1st 2008 when the programmeformally opens for applications. A further 300 days areallowed for processing applications so in practice it will beclose to 2009 before the scheme is fully working”

With regard to creating awareness in thebusiness community regarding the impendingchanges, Customs works in partnership withtrade associations through the CustomsConsultative Committee (CCC).

“We are making the trade aware of the changes throughthe CCC and the member associations of it. When we havefinished the pilot programme, we will engage with thetrade directly.”

The director general closes with a clear message to Irish trade;

“In tax and in customs, Revenue has always worked hardto balance the implementation of regulations with thefacilitation of legitimate trade and we will continue to doso. Our objective is to work in partnership with tradersand their representative bodies to ensure the successfulimplementation of the entire EU e-customs agenda and Iwould encourage business to engage early with this agendain order to make the transition as smooth as possible.”


IRISH EXPORTERS ASSOCIATION BENEFITSOF TRADE FACILITATION TO IRISH EXPORTSJohn F. Whelan - CEO, Irish Exporters Association

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Trade Facilitation is the name givento measures to simplify and reducethe impact on exporters, of importand customs procedures, securityprocedures, international paymentand insurance formalities, and portand transport processes. On the 31st July 2004 the WTO members aspart of the Doha DevelopmentAgenda , agreed to launch negotiationson Trade Facilitation. This was thefirst time trade facilitation was tobe on the WTO agenda.

Few countries can benefit more than Ireland from fasterprogress towards a world where borders, instead of beingbarriers , are simply seams stitching countries together ineven closer economic and business relationships.

Over 42 % of Irish merchandise imports are sourced fromoutside the EU and 37% of our merchandise exports go tonon-EU countries. And whereas merchandise exports aretraditionally seen as taking the main brunt of cross bordertrade bureaucracy, services exporters who now account foran additional 35% of our international trade, alsoincreasingly face cross border barriers.

In 2006 Irish services exports to non –EU countriesaccounted for 38% of the total , and we sourced 53 % ofour services imports from outside the EU. Ireland istherefore unique amongst EU countries, the USA andJapan in it’s dependence on trading relationships outsideit’s free trade zone. It is vital, to the long termcompetitiveness of the economy, not only that thesetrading relationships should be capable of being steadilyimproved but that they be expanded, particularly in thedeveloping countries where growth potential for Irishexports are more lucrative.

The cost of trade compliance in terms ofdocumentation, licences, transit lost time,double entry labour cost, etc to Irish industry isestimate at 4 billion euros per annum.

A major opportunity exists to reduce the costand improve the competitiveness of Irishexporters if trade facilitation can be focused oneliminating the unnecessary barriers associatedwith cross border trading.

However, the recent stalling of the WTO negotiations isnot helpful to reducing trade barriers, and the securitytightening procedures emanating from the terrorist attackson the Twin Towers in New York on 9/11 continue toreverberate across the globe, and increase export tradecompliance costs.

Hence the initiative taken by the UN to developand promote the Single Window concept tosimplify international trade data requirements isvery welcome. The Single Window is a practicalapplication of a trade facilitation concept meantto reduce non-tariff trade barriers and deliverimmediate benefits to all exporters and importersas well as the departments of Governmentinvolved in trade, such Revenue and Customs.

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John Whelan


The Single Window concept has already been taken up bythe UK and some other EU member states.

The Irish Exporters Association set up TradeFacilitation Ireland in 2006 to help both thetrade and Government departments to introducethe Single Window concept, at the earliestpossible date into the Irish trading scene.

Trade Facilitation Ireland’s vision for a Single Window isthat companies will only have to submit export or importinformation once electronically, and that this informationcan then be used by a range of public and private sectorbodies. This vision goes beyond what many countries havealready implemented, and would put Ireland at the cuttingedge of trade facilitation globally. Benefits for exportersand importers are seen as;

1. Cutting costs through reducing delays;2. Faster clearance and release;3. Predictable application and explanation of rules;4. More effective and efficient deployment of

resources;5. Increased transparency;6. Ireland can become a leading destination for

the Supply Chain Logistics operations offoreign multi-nationals;

7. Ireland can develop a niche, high-valuesoftware industry around developing SingleWindow solutions based on the Irishexperience.

The Single Window system should have the following features:

• The system should be aimed at all businesses tradinginternationally but special attention should be given to

SMEs, and as such the system should be simple aspossible to use. Comprehensive operating instructions andguidelines should be created for users. Help Desk and usersupport services, including training, should be established,especially in the early implementation phase of theproject. The Help Desk can also be a useful means forcollecting feedback information on areas of difficulty and bottlenecks in the system and this information canbe a valuable tool in its further development. The need for and value of practical training courses for users is critical, especially in the early implementation phase of the project.

• All options will be examined regarding user-charges forSingle Window. This could range from a system totallyfinanced by government (e.g. the Netherlands) to anentirely self-sustainable model based on user fees (e.g.Mauritius). Also, the potential for public-privatepartnerships should be explored.

• Single Window will facilitate payment of governmentfees, taxes, duties and other charges, as well asfacilitating payments between the consignee and otherprivate sector bodies. This can be a very attractivefeature for both government and trade. This elementmakes it essential that the banks are involved in theprocess at an early stage.

• In order to ensure compatibility with other internationalsystems and applications, documents and data modelsmust be based on international standards andrecommendations, particularly those developed at theUN/CEFACT and the WCO. The harmonisation,simplification and standardisation of all data used ininternational trade are an essential requirement forsmooth automatic operation of the Single Window.

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WATERFORD AT THE FOREFRONT OFECONOMIC DEVELOPMENT

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County Waterford is an attractivebusiness location. The strategiclocation of the County between thegateway cities of Cork and Waterfordensure that the critical mass is inplace to provide services and skillsto a range of industries. Availabilityof serviced sites combined withworld class energy, telecommunicationsand waste management infrastructuremeans that Waterford is a globallycompetitive location.

Building on these strengths, Waterford County Council hasput economic development at the top of its agenda. At an‘Invest in Waterford’ seminar, which was held in October2006, the County Manager, Ray O’Dwyer and the CountyMayor, Mary Green, both made the bold statement

‘Waterford is Open for Business’. This is not a shallowstatement, but is the first stage of a strategy that is beingdriven by Waterford County Council to attract investmentto the County. Through the work of an Inter-AgencyForum, with representatives of IDA Ireland, EnterpriseIreland, FÁS, and other Government departments and stateagencies, a range of actions have been alreadyimplemented to improve Waterford’s competitiveness as abusiness location. This forum provides an agile responsethat involves all relevant agencies to local economicdevelopment.

A marketing programme to promote the Countyas a prime investment location is beingimplemented. As part of this campaign, awebsite www.investinwaterford.ie waslaunched. This website is unique in Ireland asit provides investors with useful information ondoing business in Waterford, including locationmaps and details of industrial and commercialland that is zoned and available fordevelopment.

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County Waterford zoning


In parallel, the Council has established a website aimed atattracting workers to Waterford www.workinwaterford.ie.This website asks those who want to live and work inWaterford to register their skills with the Council. Thissite is also a useful tool whereby employers can target jobopportunities to those who are looking for work in theCounty. The objective is to provide businesses with adatabase of potential employees seeking jobs in Waterford.According to Brian White, Director of Community andEnterprise with Waterford County Council, the Council isvery happy with the response to the website to-date. ‘In avery short period over 250,000 hits the website. Thisillustrates the level of interest in working and living inWaterford’ he added.Developing skills in the County, Waterford Institute ofTechnology has benefited from significant capitalinvestment. An increasing number of programmes andcourses are being made available. WIT is also expandingits outreach programme and an MBA programme waslaunched in Dungarvan November 2006. Courses aretaking place in the Chamber of Waterford CountyCouncil, where the next night decisions on housing,planning and zoning are made. In addition, the agenciesin County Waterford have made strong links with thirdlevel institutions outside of Waterford, ensuring that allskills and education requirements businesses located inCounty Waterford can be squarely met. This is one of a suite of initiatives being driven byWaterford County Council and the members of the InterAgency Forum. In an effort to develop entrepreneurshipin the County, Waterford County Council, EnterpriseIreland, Waterford County Enterprise Board and

Dungarvan Town Council contributed €700,000 towardsthe development of an enterprise incubation unit inDungarvan.

Ger Enright of Waterford County EnterpriseBoard stated that ‘the link with the InnovationCentre in Waterford Institute of Technology isimportant for us as it will help entrepreneurs inDungarvan and West Waterford to be part of anetwork of innovation that is emergingthroughout the County as a result ofprogrammes run by WIT’.

The Council acknowledges that an important factor is theavailability of suitably zoned land. Strategic zonings havebeen designated in centres throughout Waterford County.‘We want to show that we are serious when it comes toeconomic development’ stated Ray O’Dwyer, County Manager.‘We have and will continue to put in place the lands,services and infrastructure required by investors. I amglad to see that the staff of the Council have taken a can-do approach to economic development and we are committedto facilitating the processes as much as we can’ he added.Mr O’Dwyer also welcomed the recent announcement bythe European Commission to allow continuation ofRegional Aid to the South East beyond 2007. ‘Consideringthe success of Ireland, this was not anticipated. It willmean that Waterford will remain on a level playing pitchwhen compared with the regional aid available in theBorder Midlands and Western Region until at least 2013.We welcome investors to visit our County and see thatWaterford is truly a top-class business location’ he stated.

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TOWARDS A BARRIER FREETRANSATLANTIC MARKETKathryn Hauser, TABD US Executive Director & Marie-Therese Huppertz, TABD EU Executive Director

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Many people might qualify thetransatlantic relationship as “difficult”,due to rifts over political & military strategies and tradedisputes, which regularly hit thepress. However, this image doesnot reflect the deep level ofintegration that characterises oureconomic trade and investmentrelationship, which is in a veryhealthy state indeed. Economic ties between the EU and the U.S.are still by far the strongest in the world.

Europe and the U.S are each others main trading partners,representing the biggest trade relationship in the world,despite the impressive economic rise of other countries likeChina and India. A recent study estimates that thetransatlantic economy continues to generate $3 trillion incommercial sales a year and employs some 14 millionpeople on both sides of the Atlantic

1. Importantly,

investment flows across the Atlantic are very strong: in2003, the total amount of two-way investment was over€1.5 trillion, composed of €731 billion of EU ForeignDirect Investment (FDI) in the U.S. and around €772billion of U.S. FDI in Europe

2.

A recent study estimates that the transatlantic economy continuesto generate $3 trillion in commercial sales a year andemploys some 14 million people on both sides of the Atlantic.

And yet not all economic potential has been unlocked:many regulatory barriers for trade and investment persist.The OECD has calculated that further transatlanticliberalisation of trade in goods, services and investment is estimated to increase U.S. and European GDP by asmuch as 3%

3. So there is room for improvement and

much to gain.

The TransAtlantic Business Dialogue (TABD), agroup of more than 30 Chairmen and ChiefExecutives of major EU and U.S. multinationalcompanies, has therefore made the establishment ofa Barrier Free Transatlantic Market its main goal.

Achieving such an ambitious goal requires both awell functioning multilateral trade system and muchdeeper regulatory cooperation across the Atlantic.

The first priority is to reach a successful outcome of theWTO Doha Development Round. With this multilateralagreement in place, all businesses, including TABDcompanies operating globally can rely on predictable andtransparent international trade rules to manageincreasingly complex global supply chains and businessoperations. This will then enable further transatlanticeconomic integration, a goal which is supplemental andfully compatible with multilateral trade liberalisation.

Today, the U.S. and EU governments areworking towards the goal of reduced regulatorybarriers on the basis of a very detailed workprogram spanning many areas.

While the TABD has welcomed the steps taken and theprogress achieved so far, we have to recognise that moreneeds to be done to guarantee a favourable transatlanticbusiness climate that will generate business expansion, jobcreation and global competitiveness.

That is why the TABD strives for a politically binding“Framework Agreement” between the EU and U.S., whichshould provide the basis for the establishment of a truly ‘Free Transatlantic Market’ within an agreed timeframe.Such a Framework Agreement, which could be kick-startedat the next EU-U.S. Summit. In the view of the TABD,such a Framework Agreement should be based on theprinciples of establishment of free movement of goods,services, capital and investment; enhanced transatlanticregulatory cooperation; and joint actions in key areas suchas protection of intellectual property rights and innovationin a global economy; and accompanied by politicaloversight to ensure progress in its implementation.

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1D. Hamilton and J. Quinlan, The Transatlantic Economy 2006, Center for Transatlantic Relations.

2http://ec.europa.eu/trade/issues/bilateral/countries/usa/index_en.htm

3Organisation for Economic Cooperation and Development, 2005: http://www.oecd.org/dataoecd/6/4/35604630.pdf


Ultimately, the EU and U.S. must develop a sustainablelong term solution, by coordinated investment and byutilising existing technologies to establish cost-efficientcapabilities to secure travel and trade.

[We must] work towards mutual recognition of supplychain security standards, which have been developed underthe EU’s Authorised Economic Operator status and theCustoms and Trade Partnership Against Terrorism in the U.S.

Improving global competitiveness of our highly interlinkedeconomies requires new way of thinking and approachingcommon challenges, such as climate change and energysecurity, the impact of pandemics or demographic trendson our health care, and the impact of rampant counterfeitingand piracy; TABD is convinced that cooperation is ameans to enhancing transatlantic innovation capacitiesthrough joint research programs and other joint actions.That is why TABD supports the Joint IPR EnforcementStrategy and advocates more cooperation and joint effortsin other areas, such as energy efficiency and security.

German Chancellor Angela Merkel, who hastaken up the EU and G8 presidencies, hasacknowledged that the U.S. and EU economiesare based on the same values and that the twoblocs should make further transatlanticeconomic integration a priority. This vision has been supported by the EU CommissionPresident Barroso. Importantly, the U.S. Senate and EU Parliament have called forcompletion of a Transatlantic Market by 2015. The TABD encourages governmentleaders on both sides of the Atlantic to use this favourable climate to establish a true Barrier Free Transatlantic Market.

Lastly, and importantly, political oversight and implementation of the Framework Agreement and its objectives must be guaranteed, by agreeing on aroadmap of steps to implement the principles outlined above, and by submission of an annual progress report to the U.S.-EU Summit Leaders prepared jointly by ministers responsible for overallimplementation of the Barrier-Free Transatlantic Market.

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The establishment of the overarching principlesof free movement of goods, services, capital andinvestment is a long term goal; it requiresmutual understanding of each others regulatorysystems, agreement to begin work to addressexisting regulatory barriers and developmechanisms for cooperation before adoptingnew regulations and standards globally.

Such a framework should include mechanisms for early warningthrough early notification before issuing new rules, a jointapproach to impact assessments, cost-benefit analysis, andscience-based quantification and analysis and post-regulatorymonitoring. It should build a system allowing for bothCongress and the European legislature to be part of theprocess and provide for means to involve other stakeholders.

Furthermore, the U.S. and EU should commit to an openinvestment climate in their respective regions. In spite of theimpressive magnitude of transatlantic investment flows,restrictions still remain and take many forms. These includeforeign ownership restrictions, non-transparent or overlyburdensome and lengthy notification and licensing requirementsfor non-residents, limitations in access to public procurementor resources in the areas of research and investment orother obligations in relation to special security requirements.

Measures to guarantee national security are ofcourse justified and the TABD does notquestion their necessity. However, a balancebetween necessary security regulations and thefree flow of people, goods, investment andcargo must be struck.

Let us highlight just one recent example; New rulesrecently adopted by the U.S. House of Representatives toscan in foreign ports 100% of the cargo destined for theU.S., will inevitably jeopardise transatlantic trade.

Immediate steps are being taken to worktowards mutual recognition of supply chainsecurity standards, which have been developedunder the EU’s Authorised Economic Operatorstatus and the Customs and Trade PartnershipAgainst Terrorism in the U.S.


IMDO - IRISH MARINE DEVELOPMENTORGANISATION SPEARHEADING THE DEVELOPMENT OFTHE IRISH SHIPPING INDUSTRY

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The IMDO is the first dedicateddevelopment, promotional andmarketing agency for the shippingservices sector in Ireland. It is abranch of the Marine Institutewhich comes under theDepartment of Communications,Marine & Natural Resources. TheInstitute was set up under the 1991Marine Institute Act.

CEO Financial spoke to Glenn Murphy, The Director ofthe IMDO regarding trade facilitation and the role that theIMDO plays within Ireland’s dynamic economy.

Mr. Murphy began by outlining the tasks with which theIMDO is charged;

“The Irish Marine Development Organisation was firstestablished in 2000. Our statutory mandate is to supportthe development of the shipping sector in Ireland. Weadvise the Government in terms of policy development,including tax and fiscal policy and business developmentin the area, including research. Overseas development andmarketing of the sector is also a function that we fulfil andis very important.”

In terms of the development of the sector, the IMDO hasbeen active working right across the entire shipping andmaritime transport services sector:

Murphy elaborates,

“Prior to 2000, the main stream Irish shipping industrywas facing a slump due to the relocation of operatingcompanies to what were at the time, more tax-friendlylocations. Irish ship owning and operating companies fellto less than 40 ships in a short space of time. TheGovernment obviously saw this as a problem whichneeded addressing and we advised them on a strategywhich included changes the tax structure with regard tomaritime operators. Ireland now has one of the mostattractive tax rates in Europe for shipowning, managementand ship operations. We are one of the most benign andcompetitive economies in this regard. As a result of this,that trend has been reversed. We are now seeingconsiderable growth throughout the sector as a whole.This is reflective of the global growth in this area. Thereare now about 170 ships owned and managed in Ireland,which is continuing to grow.”

Where else has there been growth in the sector?

“Well, an interesting point to make on that front is that,the Irish shipping services sector is an important link in thechain for the Irish economy. In 2006 we estimate thatgoods to the value of 120 billion euro passed along and

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through the all Ireland maritime supply chain. Shippingcompanies and Ports in Ireland have continually investedand reacted ahead of the curve and have been a silent buteffective partner in the Celtic tiger success story. Contraryto the popular belief that capacity should be adjusted tomeet demand – we have seen that companies that investedin creating added capacity have actually facilitated moregrowth and improved economies of scale for exportingcompanies. The reduction of “per-unit” costs thatincreased capacity brings, has lead to increased volumesultimately being shipped. We have experienced an 84%growth in capacity on LO-LO (Lift On-Lift Off) and 86%growth in RO/Ro shipments, over the last 10 years.”

That’s good news for the industry and for export marketssuch as the US.

“Yes, the US is now the largest export marketand very important market for Ireland. Despitethe fact that our shipments will go via majorEuropean ports, continued investment infrequency of services to the main continentalhubs provides greater choice, frequency andcompetition for Irish exporters to the US.”

People often don’t realise the far-reaching extent of theshipping sector and how it overlaps with many otheraspects of the economy.

“In terms of employment; over 8,600 people are employedin the sector nationwide, within approximately 350companies. These companies boast a combined turnover of€1.6 billion – so it is very considerable. This business isderived from everything from the ports, liners and ships,all the way to the banking, financing and leasing that isinvolved. Many banks also now operate in the specialisedarea of maritime banking.”

What does Murphy think of the Authorised EconomicOperator programme and the impact it will have on theIrish shipping industry?

“Well, we understand from the promoters thatthe AEO programme should ultimately lead togains in efficiencies, and if this means that Irishgoods are more competitive in the globalmarket place well then this level of innovation

is something that we support. The IMDO areenthusiastic about anything that is focused oncompetitiveness and maximising ourproductivity. If we can continue to help Irishcompanies to reach other markets and delivercompetitive advantages to them while doing so– that is a positive thing.”

I ask the director his views on the United NationsCEFACT conference coming to Dublin and Ireland’s plansto become a seminal trade facilitation hub?

“I think it’s a great news that such an important gatheringof UN decision makers is coming to Dublin to discuss tradefacilitation”, he responds, “Ireland has a track record oftackling issues that appear difficult, doing things well andsetting examples. It is therefore important that UNCEFACTare coming as it provide Ireland with a fantasticopportunity to take the lead on this important issue.”


Ever since the international trademarkets and fairs of the MiddleAges in Europe, when thecomplications of domestic as wellas international trade causedmerchant traders to look forspecialist expertise, to manage themovement of their goods, thefreight forwarder has been dealingwith matters of trade facilitation asa matter of routine.

Some of the "complications" of those days included; manydifferent standards of weights and measurements; customscharges applied by the hundreds of local authoritiesthrough which goods passed (on the 26 km stretch ofturnpike between Aarau and Sursee in Switzerland alonethere were six customs control points*). To thesedifficulties could also be added the problems presented byforeign languages, documentation, communication overlonger distances and payments.

Since those times international trade has seen theimposition and withdrawal of trade barriers, as politicalrelationships between trading nations waned or waxed,and as the idea and application of free - or even bi-lateral -trade was either embraced or abandoned.

Now with the realisation and acceptance of the benefits toall nations of free trade which was manifested by theacceptance of Customs administrations of that fact,particularly in the developed world already 15 to 20 yearsbefore 9/11, the subject of Trade Facilitation can be seenin context as a continuation of efforts, even if sporadic,over the centuries.

Since 9/11, of course, the recognition of the terrorist threatto the security of countries and international trade andsupply chains has lead to the necessity for the WorldCustoms Organisation to include physical security in itslist of major objectives.

The spark which ignited all these new approaches wasInformation Technology and its application.

The SAFE Framework of Standards, which wasproduced by the World Customs Organisation'sHigh Level Strategic Group, was unanimouslyadopted by the WCO Council in June of 2005.

As of September of last year 138 of the 169 WCOMembers had signed a Letter of Intent to implement theSAFE Framework.

The theory underlying the SAFE Framework isthat appropriate, focused and layered tradesecurity measures will actually facilitate themovement of legitimate trade across nationalboundaries. In his paper delivered to the worldbody of freight forwarders at the FIATACongress in Shanghai last September MichaelSchmitz, Director Compliance & Facilitation,World Customs Organisation said

"The SAFE Framework is the realisation of thefact that security and facilitation areinextricably intertwined or opposite sides of thesame coin".

IIFA TRADE FACILITATION & THE FREIGHT FORWARDERBy Colin Walsh, CEO of the Irish International Freight Forwarders Association

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Colm Walsh, CEO of the IIFA



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The expression "facilitating legitimate trade" has aresonance when one considers the following:

Counterfeiting accounts for 5-10% of all global trade or$144 billion annually word wide according to the EU.

The World Health Organisation says that 5-8% of worldwide trade in pharmaceuticals is counterfeit.

As if to underscore this, an item in the Journal ofCommerce of March 7th 2007 reports US Customs andBorder Protection announcing the seizure of more than100,000 pieces of counterfeit Fendi and Gucci handbagsand other "fraudulent merchandise" worth an estimated$13 million on the container ship "Ever Ultra" whichdocked at Port of Oakland from China.

Obviously there will be many benefits to be gained fromthe successful implementation of the SAFE Framework.

It is a concept that moves Customs focus from importation toexportation for security purposes and by so doing, the facilitationof legitimate cargo upon importation will be increased.

The idea is to identify high-risk shipments early in theglobal supply chain i.e. AT or BEFORE exportation.

It foresees the more rapid release of legitimatecargo on importation by identifying traders thatdemonstrate an appropriate degree of securitywithin their supply chain.

This is where the AEO comes in to the picture.

Authorised Economic Operator status underregulation 648/2005 will be granted toapplicants who meet common criteria relatingto customs control systems, have financialsolvency and a satisfactory compliance record.

The AEO statues may be granted in any of thefollowing terms: 1. Simplified Procedures 2. Security and Safety or 3. Simplifications and Security and Safety

Once granted, the status of AEO will berecognised by all Member States.

Benefits of AEO status will include:-Fewer examinationsFaster processing of legitimate cargoLower administrative costs.Improved opportunities of lower insurance ratesfor cargo.Fast resumption of trade activity following anyincident.

Overall the SAFE Framework will have benefits for thoseinvolved in international trade, the chief of which will beStandardised Customs procedures that secure, facilitateand promote international trade.

The Irish International Freight Association and its 100member firms look forward to continuing the traditions ofour historical profession in helping to expand and improveinternational trade in cooperation with the Irish Customsadministration and through it the World CustomsOrganisation and the United Nations Centre for TradeFacilitation and Electronic Business (UN/ CEFACT).

* Wilhelm Zeilbeck "Geschichte der Schweizer Spedition". (The History of Swiss Freight Forwarding -2004)

IIFAStrand House, Strand Street, Malahide, Co.Dublin Phone: 01 8455411, Fax: 01 845531 , E-mail: [email protected]

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NITLWHAT THE TRANSPORT AND LOGISTICSINDUSTRY NEEDS GOING FORWARDDr. Bernd Huber, Edward Sweeney

National Institute for Transport and Logistics (NITL)www.nitl.ie

The transport industry - particularlyin road transport - is under seriouscompetitive pressure. Rising costs -evident but not limited to trafficcongestion, fuel and insurance -combined with a market place thathas become more demanding inrelation to price and service, hasresulted in a situation wherecompanies have had to seriouslyreassess the nature of their competitiveadvantage. The competitivestrategies of companies in thesector are being reviewed in lightof the effective commoditisation oftransport as a direct result of thetraditional strong emphasis on costand price reductions.

The “race to the bottom” is increasingly being replaced bya strategic rationale which focuses on differentiation in theproduct offering. This gives companies in the transport sectorthe potential to move away from purely price-based competitiontowards the provision of a range of value-adding andknowledge-intensive services for trade facilitation. It isbeing driven by developments in the field of supply chainmanagement (SCM) which places a strong emphasis onhigher levels of integration between supply chain participantcompanies and on the need to focus on what really adds“value” – i.e. what the end-customer is willing to pay for.

The three big drivers for this are:a) globalisation - supply chains have become

more global and therefore more complex.

b) outsourcing – supply chains have become more'virtual' and global relationship managementhas become more central as a result.

c) e-logistics - complex global and virtualchains require quite sophisticated levels ofinformation and communication technology(ICT) for their effective control andmanagement.

These developments have shifted the focus of thecustomers towards service-rich, “one-stop shop” transportand logistics services, allowing them to focus on their realcore competencies in design, marketing, selling and otherkey business processes. For the transport and logisticssector to respond positively to these changes it needs tofocus, broadly speaking, on two key areas (the “soft” and“hard” wiring respectively).

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Dr. Bernd Huber


A 4PL is a supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organisation withthose of complementary service providers to deliver a comprehensive supply chain solution.


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The former is based on the need to build new andinnovative relationships with customers, based on theconcepts of partnership rather than on traditionaladversarial approaches.

The desire is to move towards mutuallybeneficial (i.e. “win-win”) relationships toreplace traditional arms-length (often “zero-sumgame”) relationships. This requires a paradigmshift in the ways in which customers andsuppliers relate and interact with each other; itrequires that hostility and mutual suspicion arereplaced by trust and transparency.Collaboration is becoming a critical capabilityas companies increasingly migrate to extendedsupply chains.

This does not happen overnight but there is evidence thatit is beginning to take place. The evolution, for example,of the so-called fourth-party logistics service provision(4PL)

1sector is an example of this. Co-operation between

manufacturers, shippers and logistical service providers isbecoming more long-term (in nature) and is combined

with a high level of integration in the organisationalstructures and informatics. We can expect that logisticsservice provision is evolving from a more transactional-basis to a more strategic one in nature, as companiesexpand their operations, technological capabilities, and theirservices to meet the increasing number and complexity ofdemands by their customers.

The latter (i.e. the “hard” wiring) is basedlargely on the potential role of ICT inimproving (i) the level of customisation oftransport and logistics services and, (ii) the levelof integration between transport and logisticsservice providers, their customers and other keysupply chain partners. Recent years have seen aproliferation of ICT solutions, e.g. RFID, withthe potential to make real advances in theseareas. Transport service provision will buildmore around ICT platforms that permit greaterpipeline visibility.

However, the transport and logistics sector has for avariety of reasons, such as the financial risk involved orthe lack of training and education, been slow in adoptingthese solutions. Wider dissemination of appropriatetechnology has the potential to contribute significantly tothe strategic differentiation of firms – particularly smallerfirms – in the sector.

One of the necessary skills in the transport sector willtherefore be the ability to manage increasingly complexsupply chains, as companies in general are challenged by acombination of mass customisation, shrinking product lifecycles, rapid inventory depreciation, complex multi-sourced supply chains, customer involvement in design,rising expectations of retailers and consumers, and theresulting need for co-ordinated data communications. Thisforces the transport sector into integrated supply chainmanagement strategies.

Evidence is also available in the 2005 NITL report ‘GlobalCompetitiveness: Chain Reactions’, where 1073 firms weresurveyed in the Republic of Ireland and in NorthernIreland across a broad range of sectors. Respondentsidentified that the outsourcing of transportation is going toaccelerate in the next three years, along with just-in-time

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Ed Sweeney

1A 4PL is a supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organisation with

those of complementary service providers to deliver a comprehensive supply chain solution.


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and overnight deliveries as well as shorter delivery times.Companies based in the Island of Ireland have the naturaldisadvantage of a location peripheral to significantmarkets and sources of raw material which result in highertransport costs and high dependence on sea ports. Forexample, Irish food exports transit costs to southern Europecan be 20% of total consignment value, with the UK beingthe land-bridge for Irish exports. The evidence suggeststhat companies in the Island of Ireland need to leveragetheir SCM capabilities and add value to their customers indelivering cost-effective multi-modal supply chain solutions.

Successful transport organisations of the future will beoperating in an increasingly complex environment of wellintegrated supply chain networks communicating over welldeveloped ICT systems on a real time basis. The design ofsupply chain solutions is a highly skilled, knowledge-intensiveand complex activity, reflected in a shift from “boxmoving” to the design and implementation of “supplychain solutions” developments. Education and trainingcan best be addressed by stimulating the development ofindustry-relevant logistics and SCM resources and skills.


BANKING AND THE ELECTRONIC SUPPLYCHAIN

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The recent evolution ofinternational commerce hasbrought banking in a new direction– right into the supply chain.Corporate customers are nowdemanding a bank thatunderstands their needs and hasthe capacity to facilitate theirsupply chain requirements throughadditional electronic services. Thisprovides banks with theopportunity to sell more servicesand acquire more customers.

This was the rationale behind the recent acquisition ofsupply chain services firm, Vastera, by JP Morgan Chase.JP Morgan saw a company which operated in a space thatit wanted to be in, but was outside their strict area ofexpertise.

Forrester, an IT research firm, commented on the trend thus,

“Financial services providers lack the expertise tosynchronise the physical supply chain with the financialsupply chain, making it hard for their clients to makesense of their financial needs in the context of theirbusiness objectives.”

According to Justin Pugsley, of Global Trade Review,

“The theory goes that by providing theplatform for the electronic transfer of [trade]data, banks can become an integral part of thatsupply chain. That, in turn, helps cement therelationship with the client.”

This point was affirmed by Elena Hergass, VP of TradeFinance in Deutsche Bank,

“It’s not just about channels for transmitting documents inelectronic format. It’s about distinct solutions for theclient’s supply chain.”

HSBC are another bank which see this area as crucialgoing forward,

“E-enablement allows banks to be moreresponsive to financing, risk management andcash management needs of corporates”, declaresthe global head of supply chain business atHSBC, Alan Beattie.

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The myriad of opportunities which are presented to banksthat enter this sphere range from risk mitigation, to tradefinance, to insurance, not to mention opportunitiesregarding the logistical information they find themselves inpossession of.

An electronically controlled supply chainprovides the bank with increased visibility andtherefore affords them more comfort in makingdecisions regarding financing.

The onset of this technology is set to create a gap incompetitiveness between early moving banks and banksthat are slow to embrace these changes.

ABN is one of the key players in supply chain finance, andone of the earliest to adopt electronic formats. RobertDungey, their head of global trade and supply chainbusiness, explains that,

“If a bank does not provide supply chainmanagement and finance, including traditionaltrade finance, there is a risk of losing the overallbusiness with any particular client tocompetitors who provide a comprehensive suiteof supply chain products.”

This signals a critical departure from tradition banking,where financial services were provided as almost ancillaryto the trading itself. It brings it to a point where the bankis taking an active, as opposed to passive role infacilitating trade through the electronic supply chain which affords them an opportunity to provide additionalservices, have access to more timely information flows and mitigate their risk.

Traders will avail of the best services on offer if they make a critical difference to their business. One foot in the electronic supply chain allows a bank to be far more sensitive to traders’ needs, and provide morepersonalised solutions.

It is on points such as these that clients are won and lost.

As Pugsley very correctly summed up,

Now, this type of technology “will formanother part of the trade finance and supplychain infrastructure. Clients will expect it aspart of their service.”

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LETTERS OF CREDIT AFTER CARELCAC TRADE SERVICES LIMITEDRichard Gardner

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LCAC stands for Letter of Creditafter Care. What’s its aim? Tooffer a service to exporters which abank or freight forwarder cannotoffer in such detail.

Why was the company formed?

To understand this, you have to understand the author ofthis article, namely me.

So let’s start at the beginning, I started work some 30years ago for a large tobacco company in their exportdivision. Initially employed as a shipping clerk, Iprogressed into the documentation area where my dutieswere preparing shipping documents for presentation tobanks, initially under collections then presenting underletter of credits. I was taught by somebody nicknamed the‘old prof’ who had some 30 years experience in exportingand, to say the least, knew all the tricks in the book. Myhomework at that time was to learn and understand theUCP 290 rules (God bless its soul) which I have to say

took some doing as the terminology used was for bankingand the other occasional article referred to shipping. ThusI learnt the first rule - the UCP was not a rule book but abook to guide the exporter and banker and thus was opento interpretation from both parties.

To most exporters one of the most frustrating things inexporting when dealing with letters of credit is being ableto produce the shipping documents correctly when firstpresenting them to the bank and in most cases the bankwill reject documents on first presentation. This is animportant issue as most exporters use the letter of credit asan instrument to guarantee payment.

The publication of UCP 400 at the time actually statedthat over 78% of all export documentation is rejected onfirst presentation. Anyway, to move along with the story,having learnt an awful lot from the prof, he retired and asluck would have it I took over the department and with itthe responsibility, thereby ensuring the company’s shippingdocuments were presented to banks and paid inaccordance with L/C credit terms. Now it was at this timewhen things took a turn in my life and destiny gave me achoice on which direction to take, in the absence of ourmessenger and combining a business meeting with a bankin the City of London I took some export documentationto a particular major merchant bank.

On presenting the documents I was asked if I had everthought about joining a bank in documentary credits.

The outcome was that I agreed to sit a test with otherbankers on what was initially a test on how many discrepancieswe could spot on a presentation of dummy documents.

I was surprised that the result gave me an opportunity tobe offered a job within the bank, and given the mortgageinterest rate at the time and what the bank was offering, itwas an easy decision, thus ended my career in corporateexporting.

The early days in Banking became a complete learningcurve compared to everything I had learnt from the otherside, the discipline on what you could do and what youcould not do; the culture shock was enormous. The ideathat the UCP manual was a guide book became theopposite - THE UCP WAS A RULE BOOK.

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Richard Gardner, LCAC


Now forgive me for being cynical here but in the twenty yearsin banking I worked for many banks, most were ‘A’ Rated,and found to my astonishment that each bank had its owninterpretation of UCP rules 290, 400,500, and no doubt 600.

The one thing I learnt in banking was that theperception from exporters that banks withholdfunds to gain interest whilst documents havebeen rejected and are awaiting acceptance fromthe buyer, is foolish and incorrect. I alsorealised that some banks were inflexible whencertain errors in documentation were detected.These could easily be rectified by the bank, butwould not be as the bank were not responsibleor legally bound to do so and thus the exporterhad to change/rectify their documents fromsomething as simple as marking an invoice asoriginal or an insurance certificate as a copy.This simple conception could result in exportersincurring discrepancies such as, an L/C expiresor late presentation being incurred - frustratingand costly for the exporter.

Finally, having reached the top of my profession within theTrade Finance arena in banking, I decided to return to the

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corporate environment, knowing I had the knowledge onboth sides which resulted in being employed for ten yearsas Global Trade Finance Manager at Tate & Lyle PLC.

Anyway the whole reason for this short résumé is to pointout that the experience gained working in both corporateand banking environments gave me an insight into settingup a company that understands what the exporters’concerns and requirements are, as well as understandingwhat banking requirements are.

To date we have been able to offer services to small,medium and FTSE 100 companies in both the UK & USAmarkets, we offer Trade finance instruments that mostexporters from small to large don’t even know exist. Giveus your problem and you will have an answer, fromdocumentation to structuring deals.

LCAC Trade Services Limited employs peoplethat have worked in both corporate andbanking environments. We pride ourselves inknowing what the exporter is trying to achieveand understanding what the bank requires.

This makes LCAC a unique trade services supplier.


MICROSOFT IN IRELAND A WORLD CLASS LOCATION FOR AWORLD CLASS COMPANY

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Joe Macri, Managing Director ofMicrosoft Ireland describes Microsoft’sexperience of the island and whyhe thinks it is the best place fromwhich to launch a European initiative.

“Microsoft first came to Ireland in 1985”, explains themanaging director, “as a relatively small, 10 year oldcompany which was looking for a base from which totackle the EU market. Ireland had positioned itself as thedestination of choice due to its strong and well-educatedworkforce, its competitive rate of corporate tax and thefact that it is English speaking.”

“We had a vision at that time of having a world classmanufacturing plant which employed 100 people. Now wehave 1,200 full time employees here and do nomanufacturing. So that gives you an idea of how thingshave changed since then.”

Indeed it does. I then asked Macri about the functions ofthe Microsoft Ireland operation.

“We have four divisions here, the EU operations centre,the European Product Development Centre, the Irish Sales& Marketing Services Group and the EuropeanDevelopment Centre which is responsible for R&D.Microsoft Ireland is therefore a very important hub withinthe context of Microsoft internationally, as we areresponsible for many functions of the business throughoutthe EU, the Middle East and Africa.”

The issue of government is one which is crucial to a multinationalwhen operating in any country. How has the Irish governmenttreated Microsoft after its establishment in the country?

“Well, the Irish government has been great”, declares Joe,“The IDA have continually helped us in various ways, ashas Science Foundation Ireland with regard to the R&Dside of our operations.”

“The impact that Microsoft has had in Ireland has beenquite extensive. We estimate that 5,000 people are employedindirectly as a result of our being here. We invest €250million every year in the Irish economy through our supplychain and we are responsible for 5.6% of GDP inIreland.”

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Joe Macri, Managing Director of Microsoft Ireland


“So, Ireland has been good to us. We like to show ourappreciation by giving back to society through corporatesocial responsibility programmes. These includepartnerships with Enable Ireland, the Digital CommunitiesProgramme, FIT and the ISPCC. In addition, we recentlycommissioned economist Paul Tansey to compile a reportentitled, “Productivity: Ireland’s Economic Imperative”.The report has been a contribution to the ongoing debateand analysis about Ireland’s economic future and hashelped place the issue of productivity at the centre ofIreland’s economic future.”

“Microsoft also enables me to dedicate 15 – 20% of mytime to projects outside of the business,” the managingdirector informs us, “I was was appointed Chairman ofthe Small Business Forum by Minister for Enterprise,Trade and Employment, Mr. Micheál Martin T.D., I serveon the board of the Health Service Executive, I’m on theNational Executive Council of IBEC, and I am also aboard member of the Irish Management Institute (IMI).So, as well as creating a successful business – we also seekto contribute to the societies we operate in.”

So, how would Macri recommend Ireland itself as acountry to do business from?

“I think that Ireland is an excellent choice for anyinternational company wishing to tackle the EU market.The reasons that we came here for initially still exist, but

because of the fact that there was so much FDI during thatera, there is now a critical mass of management expertise,technological expertise and innovation in the country. Thecapabilities, advantages and infrastructure are all herealready, so for a new player, I think it’s the best place tocome.”

“Ireland has struck the right balance on the regulatoryfront, balancing the needs of the individual, the economy,organisations and society in general whilst keeping theadministrative burden to a minimum.”

“There is a focus right now on looking at issues ofcompetitiveness. This is a healthy and timely thing to doand we strongly believe that a conserted effort to helpraise productivity levels will benefit Ireland Inc – and thecompanies that are located here. We believe so strongly inthis issue that we are partnering with the IrishManagement Institute (the IMI) to develop the NationalProductivity Centre. This will be up and running thissummer and will highlight the role that managementcapability and IT deployment can have on addressingproductivity.”

“Our message is that, in hindsight, Microsoft’s decision tolocate in Ireland was and continues to be, an excellentdecision. The government is very pro-business. It has beena very successful location for us and we have a great teamof people working here with us.”

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Taoiseach Bertie Ahern and JP Courtois, Microsoft


DIAGEO IRELAND AND ITS GLOBALSUCCESS

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Diageo is one of Ireland’s leadingcompanies, with a long and proudtradition of commercial successand community involvement.Through great brands andproducts we have assured ourposition as Ireland’s outstandingpremium drinks business. Diageo isa relatively new company createdby the merger in 1997 of Guinnessplc and Grand Metropolitan plc,two of the world’s most wellknown drinks companies. With acollection of outstanding brands,Diageo is now the world’s leadingpremium drinks business.

We have the broadest and most recognised range ofpremium drinks brands in the world. Our global brands ofGuinness, Smirnoff, Johnnie Walker and Baileys Original

Irish Cream are known and enjoyed worldwide. Weoperate in more than 180 markets across the world, withover 20,000 employees and annual turnover isapproximately GBP £9.7billion.

Diageo’s roots in Ireland go back well over 200 years tothe establishment of Smithwicks’s in Kilkenny in 1710 andGuinness at St. James’s Gate in 1759. Since then thebusinesses that form Diageo operations have been at theforefront of both Irish business success and directcommunity involvement and support.

Today, Diageo’s operations in Ireland are collectively a€1.8 billion business bringing the iconic brands, Guinness,Bushmills and Bailey’s Original Irish Cream, to consumersin over 150 countries across the world. Ireland is one of

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Diageo’s leading markets and is a vital production centreof premium brands and ingredients for domestic andworldwide sales. The Global Brand teams based in Irelanddevelop sales and marketing strategies to meet the needs ofinternational markets worldwide. With exports of over€800million annually, Diageo is one of Ireland’s mostimportant exporters in the high value-added food andbeverage category.

Diageo is producing, distributing and marketingsome of Ireland’s best- known premium drinks.Guinness is the world’s most famous and bestselling stout, and an investment of €40millionhas been made in the St. James’s Gate Breweryin Dublin to increase the brewery’s capacity by50%. This has meant that over 50% of allGuinness brewed in Dublin is exported to theInternational market and St. James’s Gate is thesecond largest brewery in Europe. Recentinvestment has also been made in ourWaterford brewery to meet the growingdemands for Guinness in global markets.

Budweiser and Carlsberg, both brewed under license byDiageo, are key brands in the beer market in both Irelandand internationally. Bailey’s Original Irish Cream, ofcourse, is highly regarded abroad – it is the world’snumber one liqueur and number six spirit brand and all ofthe Bailey’s produced is done so in its plants in Dublin andAntrim. Bailey’s now accounts for over 50% of Ireland’sspirits exports.

The Guinness Storehouse at St. James’s Gate opened in2000 having been completely refurbished to allow visitorsto see and hear the story of the history and evolution ofGuinness. It is now Ireland’s must-see visitor attractionwith almost 1 million visitors annually. GuinnessStorehouse is now the 5th most popular brand experience

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in the world and allows Diageo to promote the story ofGuinness to a world-wide audience. Diageo’s operations are located throughout Ireland. Thesedeliver premium brands to consumers in Ireland andabroad. The Diageo range of premium brands includesnine of the world’s top 20 premium distilled spirits brands.The North American market is one of our top prioritiesand represents a great opportunity for Diageo in thefuture. We have had a significant presence in Africa formany years. Guinness Foreign Extra Stout is thecontinent’s most widely available beer. In fact theGuinness brewery in Nigeria is the second largest breweryafter St. James’s Gate in Dublin. In addition to the topmarkets, we are widening and deepening our focus on thedeveloping markets, which include countries ofconsiderable potential such as China, Russia, India andBrazil and these countries offer export opportunities forDiageo Ireland to advance.

Diageo Ireland is clearly focused on growing both ourdomestic market share, and increasing the scale of ourglobal export sales by leveraging the quality of our brands,production and location within Ireland.


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