WCO/WTO – “The role of advanced technologies in cross-border trade: A customs perspective”

The WCO and the World Trade Organization (WTO) held a webinar to launch their joint publication on Customs use of advance technologies.  The event attracted more than 700 attendees and provided insights into how advanced technologies can help Customs administrations facilitate the flow of goods across borders. The publication titled, “The role of advanced technologies in cross-border trade: A customs perspective” provides the current state of play and sheds light on the opportunities and challenges Customs face when deploying these technologies.

The publication outlines the key findings of WCO’s 2021 Annual Consolidated Survey and its results on Customs’ use of advanced technologies such as blockchain, the internet of things, data analytics and artificial intelligence to facilitate trade and enhance safety, security and fair revenue collection. 

The joint publication highlights the benefits that can result from the adoption of these advanced technologies, such as enhanced transparency of procedures, sharing of information amongst all relevant stakeholders in real time, better risk management, and improved data quality, leading to greater efficiency in Customs processes and procedures.

In his remarks, WCO Deputy Secretary General Ricardo Treviño Chapa said, “Technologies will assist implementation of international trade facilitation rules and standards, such as the WCO Revised Kyoto Convention and the WTO Trade Facilitation Agreement. We are therefore delighted to be partnering with the WTO, to ensure that our work in assisting our Members’ digital transformation journeys is complementary, that we bring all relevant partners to the same table, and that we avoid duplication.”

In her opening remarks, WTO Deputy Director-General Anabel González noted, “Advanced technologies offer customs an opportunity to take a big leap forward on trade facilitation. Take blockchain. Its widespread application could help us make trade both more transparent and less paper intensive. That would reduce trade costs, which is good news for everyone, especially small businesses, which are disproportionately affected by red tape at the border.”

The webinar presented the main findings from the WCO/WTO paper and featured presentations by BrazilNigeriaSingapore and the Inter-American Development Bank. For a greater uptake of these technologies, the speakers underlined the importance of continuous sensitization of Customs and other stakeholders, the need for interoperability and implementation of international standards, the relevance of engaging in dialogues at international level, as well as having a strategy and space for innovation and testing at national level.

The full publication can be accessed here.

WCO News – First Edition 2022

WCO News features an article by the Secretariat on the WCO Data Model – the common language for border management-related processes which enable information to flow seamlessly across different IT systems. The article focuses on the latest data requirements and processes which have been included in the Model through collaboration with stakeholders in the maritime, food safety, waste management and postal sectors. In addition, it offers some practical guidance to Customs administrations which are considering adopting the Model and calls on economic operators to use it in their commercial processes also, as it covers some of the data elements found in commercial documents such as the invoice, packing list and bill of lading.

This is followed by an article by the Botswana Unified Revenue Service (BURS) introducing various projects dealing with the collection, analysis and sharing of data. The author also emphasizes that a culture of innovation has emerged within BURS, and that the working environment supports creative thinking and the generation of new or improved products, services and processes.

The third article presents the results of, and lessons learned from, the first International Survey on Customs Administration (ISOCA), which was co-managed by the WCO and the IMF with the aim of collecting quantitative and qualitative data on Customs administrations and enabling comparisons to be made between countries that share common features. A higher number of participants is required for the Survey to provide a global view of the roles played by Customs administrations, and of their practices. I hope more administrations will participate in future editions of the Survey, which will be simplified to strike a better balance between the need for accurate data and the burden of data collection.

In the next article, Dominican Republic Customs introduces the tools it has developed to measure the time required to release goods and support the Government’s Release in 24 Hours (D24H) Programme, whose objective is to turn the Dominican Republic into the logistics epicenter “par excellence” of the Caribbean region.

A further article takes us to Niger, where the Customs Administration recently financed a study into the use of satellite imagery to analyze cross-border trade flows. The article presents the information collected and explains how it will be used to reorganize operational services and provide efficient links within the territory.

The final article in this Dossier sheds light on the need for harmonization in the digitization of trade documents. This article by the ICC introduces the ICC’s Digital Standards Initiative (DSI), a collaborative cross-industry effort to advance the digitization of trade globally through the adoption of a set of standards.

Many other articles published in this edition of the WCO News directly or indirectly touch on data and on the role that information technology plays in making us more efficient. And this is true of all the editions of our magazine. You have heard or read it many times: in today’s world, it’s all about data. Data is strategic, and we all stand to gain by sharing experience and expertise on how best to manage it in a holistic way.

Source: WCOOMD, March 2022

WCO supports the launch of the Global NTFC Forum 2022

The World Customs Organization (WCO) has joined hands, once again, with partner Annex D+ organizations (GATF, ITC, OECD, UNECE, UNESCAP, WBG and WTO) in supporting the Global Forum 2022 for National Trade Facilitation Committees (NTFCs). The Forum is being held from 1 to 4 February 2022 in a virtual mode and led by the United Nations Conference on Trade and Development (UNCTAD). It has brought together more than 500 participants, around half of which are members of their NTFCs.

In the high-level opening session, the speakers agreed on the need to ensure well-functioning, holistic and dynamic NTFCs, with their critical role in facilitating trade especially during the COVID-19 pandemic, through collaborative arrangements amongst all relevant public and private sector stakeholders. Embracing digital tools, the e-commerce growth and the importance of MSMEs and women traders were also highlighted by the speakers.

In his video address, Dr. Kunio Mikuriya, the Secretary General of the WCO emphasized the importance of trade facilitation during the COVID-19 pandemic recovery phase. Through simplifying and standardizing border procedures and creating transparent and predictable conditions for trade, Customs administrations facilitate legitimate business that, in turn, increases economic growth and job opportunities.

Secretary General Mikuriya mentioned a survey carried out in 2021, where the WCO took stock of the situation in the area of NTFCs, including the challenges and opportunities observed during the COVID-19 pandemic. Many NTFCs have put their work on hold, due to the inability to meet in person. However, in some instances NTFCs played an important role in addressing facilitation priorities during the pandemic, and have benefited from the sense of urgency generated by the crisis.

Dr. Mikuriya emphasized the need to strengthen the partnership among all relevant government authorities for improving border agency cooperation, which is essential in emergency situations. He reiterated the need to foster the dialogue and collaboration with the business community and underscored the private sector contribution to digitization, to conducting the Time Release Studies and in advancing Authorized Economic Operator (AEO) programmes, while taking into consideration the specific challenges of MSMEs.

The importance of increased diversity and inclusion in trade facilitation reforms, including improving the conditions for women traders was also highlighted. The WCO supports this agenda through its Network for Gender Equality and Diversity, amongst others.

The WCO reiterated its commitment to the TFA agenda in developing and least developed country Members through the WCO Mercator Programme.

The NTFC Forum was made possible with the support of the United Kingdom’s Her Majesty Customs & Revenue (HMRC) through the HMRC-WCO-UNCTAD Trade Facilitation Capacity Building Programme, which brings together the WCO and UNCTAD in a partnership for TFA implementation.

The whole address of the Secretary General can be found here.

Pakistan Customs Joins TradeLens

By joining the blockchain-underpinned platform TradeLens, Pakistan Single Window is supporting Customs in modernizing its import-export documentation through a safe & secure, paperless, digital solution to strengthen its controls against trade-based money laundering.

On 20 December 2021, On behalf of Pakistan Customs, the Pakistan Single Window Company today signed an agreement with TradeLens, a blockchain-underpinned logistics platform supported by 5 of the 6 largest ocean carriers globally, to digitize import-export documentation of the containerized cargo moving in and out of the country. Pakistan’s international trade ecosystem is being rapidly transformed through the introduction of technology driven initiatives led by the Pakistan Single Window and the country’s authorities recognize the potential benefits of digitizing supply chains for efficiencies, enhanced transparency, and data-driven decision making.

Advisor to the Prime Minister on Finance and Revenue Mr. Shaukat Tarin added, “Joining the TradeLens platform is allowing us to enhance our ecosystem in a way that all the involved stakeholders get access to a transparent and secure platform that makes processes more efficient.”

Cross-border containerized supply chains are some of the largest and most complex business ecosystems in the world today. It is not uncommon for 30 independent parties, 100 people and up to 200 exchanges of information to be connected to a single shipment. With increased complexity comes increased cost. Shippers or beneficial cargo owners (BCOs) need consistent, auditable and immutable data from multiple sources to effectively manage their supply chains.

The authorization to sign the collaboration came from the PSW Governing Council chaired by Mr. Shaukat Tarin. The Chief Executive Officer of PSW Aftab Haider formally signed the agreement with Irtaza Hussain, the Regional Head of Network for TradeLens at IBM.

PSW integration with TradeLens will help Pakistan Customs and other trade regulators to improve their operational efficiency and create value through the blockchain platform. The immutability of Blockchain-underpinned document information is important in the identification of illegal activities, as well as, improving the smooth operation of legal trade.

Marvin Erdly, Head of TradeLens at IBM. commented “The growth of the TradeLens’ network is evidence that participants from all across the supply chain ecosystem can derive significant value through digital collaboration.  Pakistan now joins an increasing number of connected Customs Authorities on the TradeLens platform exploring innovative solutions to enhance global trade access and enhance process efficiencies for all involved”.  

TradeLens is a neutral platform brings together data from the entire global supply chain ecosystem including shippers and cargo owners, 3PLs and freight forwarders, intermodal operators, customs and government authorities, ports and terminals, and several ocean carriers. This data allows TradeLens and its network partners to modernize manual and paper-based documents by replacing them with blockchain-enabled digital solutions. It also allows the network partners to provide their customers with deeper visibility into the entire journey for their cargo from origin to destination and reduce uncertainty allowing for better planning and reduced inventory costs. TradeLens welcomed it’s first network member in Pakistan, Al-Hamd International Container Terminal, earlier this year.  

Source: TradeLens, 28 December 2021

International Customs Day 2022

The WCO dedicates 2022 to the Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem

Traditionally, every year, the Customs community comes together on 26 January to mark International Customs Day. This day of celebration is a unique opportunity for WCO Members, the WCO Secretariat and global Customs’ partners to reflect on a particular theme and to act upon it. 

Thus, throughout 2022, under the slogan “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”, the Customs community will be focusing on how to operate in a fully digital environment and create an operating model that captures and exploits data from across the trade ecosystem.

Over the years, digital technology has evolved rapidly and Customs can now tap into data from other government agencies, commercially available databases, and open-source information platforms such as digitized global public records and multilingual news sources. 

The extent to which data can be used effectively depends on various factors surrounding data ethics, including privacy, commercial secrecy and legal issues regarding the use of data by Customs and Tax administrations, and the importance assigned to innovation in public administrations. 

To build data ecosystems, or consolidate existing ones, the following enabling actions may be considered:

  • establishing formal data governance to ensure the relevance, accuracy and timeliness of data;
  • making use of the standards developed by the WCO and other institutions regarding data format and data exchange;
  • providing appropriate management of data to ensure that the right people have access to the right data, and that data protection regulations are respected; and,
  • adopting progressive approaches, such as data analytics, to collect and successfully exploit data to drive decision-making.

A robust data culture empowers people to ask questions, challenge ideas and rely on detailed insights, not just intuition or instinct, to make decisions.

In order to nurture a data-driven culture, administrations need to enhance the data-literacy of their staff – in other words, their ability to interpret and analyze data accurately. 

Customs administrations should integrate data science into their curriculums for newly recruited officers and participate in the development of distance learning courses to familiarize Customs officers with the collection and analysis of data in order to forge a data-driven culture. Staff also need to understand the bigger picture, namely the impact of Customs on the effective protection of society, trade facilitation and fair revenue collection. 

On the other hand, Customs administrations are invited to consider leveraging data in their relationships with other actors along the supply chain, as well as making data available to the public and academia as a means of enhancing transparency, stimulating the production of knowledge and enabling dialogue with civil society.

Sharing data analysis with other government agencies increases the role and visibility of Customs in policy-making and in obtaining necessary resources, including donor funding. Disseminating Customs data and information in society is part of governments’ response to the general demand for open governance.

To support Customs administrations, the WCO Secretariat has placed data-related topics on the agendas of several committees and working groups, organized awareness-raising seminars, developed e-learning modules, drafted a Capacity Building Framework for Data Analytics which was adopted by the WCO Council in December 2020, issued practical publications and published articles in the WCO News Magazine.

Moreover, a community of experts has been established, under the name of BACUDA (BAnd of CUstoms Data Analysts), which brings together Customs and data scientists with the objective of developing data analytics methodologies. 

The Secretariat will continue to investigate ways to collect and share data on Customs administrations with a view to enhancing the way it delivers capacity building, and will continue to undertake data-driven assessments and work with international experts to respond to assistance requests.

More measures will be presented in the WCO Data Strategy that the WCO Secretariat is currently working on. The ambition will be to make data a vernacular language among Customs administrations and between the WCO Secretariat and WCO Members. The road ahead is not an easy one, there will inevitably be challenges along the way, but as we have learned during the COVID-19 pandemic, the Customs community is united, stronger and more resilient in the face of adversity. 

Dr. Kunio Mikuriya

WCO Secretary General

26 January 2022

WCO Data Model 3.11.0 – Online

Unlike the previous versions where the WCO DM was made available on the WCO Members’ website in a downloadable format, version 3.11.0 of the WCO DM is being released on a new publication platform: the WCO DM app. This app interactively displays WCO DM components and aims to enhance the user experience of working with the WCO DM. In so doing, it helps users navigate through different WCO DM data objects, such as classes, data elements and information models, more easily.

The publication of version 3.11.0 in December 2021 marks the culmination of the maintenance process undertaken by the DMPT in its meetings held from September 2020 to April 2021.

In addition to incorporating changes requested by Members through the regular maintenance procedure, version 3.11.0 introduces two new Message Implementation Guides (MIGs) – for implementing the IMO Compendium and WCO-UPU Joint Message Standards.

The MIGs offer practical guidance and additional technical information useful for implementation of the DM, in addition to the semantic definitions available in the Base Information Packages (BIPs) and/or Derived Information Packages (DIPs).

The IMO MIG includes technical information for implementing ship reporting formalities outlined in the Convention on Facilitation of International Maritime Traffic (FAL Convention). This MIG is the result of the joint efforts of the WCO and the IMO in updating the IMO Compendium on Facilitation and Electronic Business.

The UPU MIG contains technical information relating to primary electronic message formats, namely CUSITM, a message for a postal operator to transmit mail item information to its local Customs authority, and CUSRES, a message to respond to a CUSITM message.

In accordance with the Council Decision of December 2020, the WCO DM package published in the DM app is available free of charge to all interested parties, including Members, partner international organizations and private-sector stakeholders. All those interested in accessing the WCO DM will be able to take advantage of the app after accepting the WCO DM use terms and conditions. The app is accessible at http://datamodel.wcoomd.org.

WCO – New technology-assisted capacity building: the Virtual Reality (VR) assisted training program

The WCO has announced that it has set up a VR training program with the support of CCF-Korea at the WCO Headquarters on 9th November 2021. 

This program was developed and first established in RTC Korea last September to support customs officials to learn and understand the basic procedures of physical inspection on containerized cargo at a maritime port.

With the help of VR devices and a cyber master, a trainee is requested to select one of three individual scenarios and detect contraband items such as drugs, counterfeit goods and explosives smuggled in imported cargo.

After selecting one case, documents have to be compared and discrepancies identified. The program will show necessary steps to wear safety gear, inspect the exterior of the container, scan it with ZBV vehicle and study the X-ray black/white and coloured images. In the following step, the container is opened and inspected with tools like a chisel, magnifying glass, scanner, etc., at a bonded area of a dedicated warehouse.

RTC Korea, KCS and WCO Secretariats contributed to the program production and provided materials on drug smuggling cases with pictures, advice on preparatory steps, inspection scenarios taking into account risk indicators from the WCO RM compendium.

The length of one training session is approximately 10 to 15 minutes depending on the trainee‘s progress, and the devices for the VR training are the headset, controller, high-end computer, TV screen and kiosk. The program also developed a screen version that Customs officials can play on their desktop computer and notebook and have the 3D experience.   

During the experience session, Dr. Kunio Mikuriya, the Secretary General of the WCO, expressed high interest and called on feedback on future activities from those who experience the program to make it more relevant for Members’ capacity building. In this regard, the immediate task is to prove its effectiveness through regional capacity building activities and WCO meetings. 

Dr. Taeil Kang, the Director of Capacity Building Directorate expressed his plans to develop content for other topics including e-commerce transactions, X-ray image screening and uploading on CLiKC and installation in other WCO regions. 

For more information, please contact Sungsig Kim, CCF-Korea manager at the Capacity Building Directorate (sungsig.kim@wcoomd.org).

UNECE eTIR – Turning Borders into Bridges

The United Nations Economic Commission for Europe (UNECE) administers the TIR Convention, which was established in 1959 and extensively revised in 1975 and which has, at present, 68 Contracting Parties. The TIR Convention provides for an internationally recognized procedure to facilitate the cross border transportation of goods in transit through the use of a standard, internationally recognized Customs document, the TIR Carnet, which also serves as proof of existence of an internationally valid guarantee.

For many years the TIR Convention proved to be an efficient facilitation tool. However, with the progress in technology, the use of the paper TIR Carnet is increasingly becoming archaic, in particular when it comes to linking it to the electronic procedures applied by national Customs administrations. At each border crossing, Customs officers are faced with additional work of having to key in up to 50 data elements into their national electronic Customs system. In addition, the current situation does not enable Customs authorities to effectively apply risk management procedures based on advance cargo information, as demanded by an increasingly more security-conscious environment.

The eTIR Project

The Contracting Parties to the TIR Convention launched in 2003 the so-called “eTIR Project”, aimed at providing an exchange platform for all actors (Customs authorities, holders, guarantee chains) involved in the TIR system, known as the “eTIR international system”. The eTIR international system aims to ensure the secure exchange of data between national Customs systems related to the international transit of goods, vehicles or containers according to the provisions of the TIR Convention and to allow Customs to manage the data on guarantees, issued by guarantee chains to holders authorized to use the TIR system.

For more information on eTIR click here!

For more information about eTIR Specifications click here!

For the eTIR flyer click here!

WCO News – October 2020

The WCO has published the 93rdedition of WCO News, the Organization’s flagship magazine aimed at the global Customs community, which provides a selection of informative articles that touch the international Customs and trade landscape.

This issue looks more specifically at Customs valuation, a technical but fundamental subject. Since its inception, the WCO has always been closely associated with the different multilateral systems used to value imported goods. As the Technical Committee on Customs Valuation established by the WTO Agreement on Customs Valuation has just celebrated its 50th Session, we thought it appropriate to retrace the history of the rules used to determine the value of imports, the challenges raised by their implementation and existing opportunities for Customs to enrich their knowledge and improve their practices in this area.

The “Panorama” section covers various topics such as the development of electronic tariff platforms in Africa, the improvement of the food clearance process in India, the construction of an advanced digital platform for trade and logistics in the United Arab Emirates, enhanced collaboration between Australia and Korea through officer placement, and, finally, the perspective of Customs experts on issues deemed important in their own country or area of work.

Following on from the previous edition of the magazine, we have compiled articles related to the COVID-19 pandemic in the “Focus” section. The WCO Secretariat presents, in particular, the new procedures and new tools adopted to ensure continuity of activities by the Organization’s working bodies. As for capacity building, it is discussed in an article describing the remote delivery of Mercator Programme Stocktaking and Forward Planning missions by the WCO team overseeing the HMRC-WCO-UNCTAD Programme.

The “Flash info” section includes a long article on the new approaches to measuring corruption and integrity which have been adopted by the WCO Secretariat team in charge of the Anti-Corruption and Integrity Promotion (A-CIP) Programme, and what lessons can be learned from their experience so far.

Finally, this issue’s “Point of view” article highlights the benefits of using systematic non-intrusive screening equipment and automatic detection to screen baggage upon arrival at airports.

It has been our great pleasure to produce another edition of WCO News and we trust that you will enjoy reading this issue, whether it be the paper version or the new mobile-friendly digital one.

Source: WCO, 28 October 2020

EC – Proposes ‘Single Window’ to modernise and streamline customs

The European Commission has today proposed a new initiative that will make it easier for different authorities involved in goods clearance to exchange electronic information submitted by traders, who will be able to submit the information required for import or export of goods only once. The so-called ‘EU Single Window Environment for Customs‘ aims to enhance cooperation and coordination between different authorities, in order to facilitate the automatic verification of non-customs formalities for goods entering or leaving the EU.

The Single Window aims to digitalise and streamline processes, so that businesses will ultimately no longer have to submit documents to several authorities through different portals. Today’s proposal is the first concrete deliverable of the recently adopted Action Plan on taking the Customs Union to the next level. It launches an ambitious project to modernise border controls over the coming decade, in order to facilitate trade, improve safety and compliance checks, and reduce the administrative burden for companies.

Paolo Gentiloni, Commissioner for the Economy, said: “Digitalisation, globalisation and the changing nature of trade present both risks and opportunities when it comes to goods crossing the EU’s borders. To rise to these challenges, customs and other competent authorities must act as one, with a more holistic approach to the many checks and procedures needed for smooth and safe trade. Today’s proposal is the first step towards a fully paperless and integrated customs environment and better cooperation between all authorities at our external borders. I urge all Member States to play their part in making it a true success story.”

Each year, the Customs Union facilitates the trade of more than €3.5 trillion worth of goods. Efficient customs clearance and controls are essential to allow trade to flow smoothly while also protecting EU citizens, businesses and the environment. The coronavirus crisis has highlighted the importance of having agile yet robust customs processes, and this will become ever more important as trade volumes keep on increasing and new challenges related to digitalisation and e-commerce, such as new forms of fraud, emerge.

Currently, the formalities required at the EU’s external borders often involve many different authorities in charge of different policy areas, such as health and safety, the environment, agriculture, fisheries, cultural heritage and market surveillance and product compliance. As a result, businesses have to submit information to several different authorities, each with their own portal and procedures. This is cumbersome and time-consuming for traders and reduces the capacity of authorities to act in a joined-up way in combatting risks.

Today’s proposal is the first step in creating a digital framework for enhanced cooperation between all border authorities, through one Single Window. The Single Window will enable businesses and traders to provide data in one single portal in an individual Member State, thereby reducing duplication, time and costs. Customs and other authorities will then be able to collectively use this data, allowing for a fully coordinated approach to goods clearance and a clearer overview at EU level of the goods that are entering or leaving the EU. 

This is an ambitious project that will entail significant investment at both EU and Member State level, in order to be fully implemented over the next decade or so. The Commission will support Member States in this preparation, where possible, including through funding from the Recovery and Resilience Facility, to enable them to reap the full, long-term benefits of the Single Window. 

Source: European Commission, 28 October 2020

Guide to the WCO E-Commerce Framework of Standards

It is often difficult to navigate and assimilate the myriad of documentation and annexes associated with significant initiatives such as WCO’s ‘framework of standards’. True, the documentation is detailed and technical. There are, however, online training courses available on the WCO website for users wishing to attain a level of proficiency on a particular subject. Furthermore, member states can request technical assistance from WCO in the establishment of capacity for the implementation of specific Customs initiatives.

However, sometimes one requires a synopsis or insight as to what a particular initiative aims to achieve. This is important so as to establish the nature and extent of change and capacity required in one’s own domestic situation. In my area of operation, MS PowerPointTM plays an important role in uniformly conveying key information to a multitude of people across different disciplines in the organisation. Im happy to share a ‘guide’ which consolidates most of the ‘official’ WCO documentation that comprise the Framework of Standards on E-Commerce. When viewed as a PowerPoint Show, all hyperlinks to the official WCO E-Commerce documentation are available for download or display. Below are versions for both standard PowerPoint or PowerPoint Show. I hope it will serve some useful purpose.

Guide – WCO Framework of Standards on E-Commerce [PPTX, 3MB]

Guide – WCO Framework of Standards on E-Commerce [PPSX, 3MB]

Blockchain – introducing Customs to the Global Supply Chain, earlier

Picture: Dadiani Fine Art

Customs authorities are age-old institutions whose missions have been subject to numerous changes over time. Historically, the main role was to levy customs duties, which, in other words meant collecting resources for the benefit of local authorities. Today, customs performs many other functions, from securing national borders, recording import and export trade and prevention of fraud and illegal trade activity.

From the customs authority’s perspective, there is a constant focus on finding innovative technology and new methods and techniques to become more effective on risk assessment and inspection of the goods circulating across their borders. At the same time, customs authorities must examine the consequences these changes will have on trade, avoiding the creation of additional burden and obstacles for industries and entities involved in the exchange. Adopting flexible technology is often key for meaningful strategic transformations.

More quality data with accuracy and speed

Each country has its own policies for operating border control when goods arrive or depart from their territory. Most of these policies work from systems built off a central repository, powered by data collected from different sources. Time and effort are often spent in sorting and cleansing data from these various sources but disconsonant data can still create confusing outcomes when analyzed.

While globalization gives an incentive to operate in an open market, the increased amount of trade activity also conceals illicit activities that must be supervised by customs authorities, such as tax evasion, drug traffic or smuggling. It is in the best interest of the entire industry to cooperate, allowing data sharing to flag the early recognition of risky trade transactions.

Receiving data related to the supply chain activities prior to and during the transportation process can assist authorities, supporting them to pinpoint risky elements on international trade. Data validation across various trade and transportation documents allows authorities to manage detailed risk assessment processes and is enhanced with access to earlier and more granular information.

Providing government authorities with access to upstream transport data is one of the features of TradeLens. On the platform, customs authorities have access to data related to their countries from the moment a booking is placed with a carrier. Updates on documents from different data sources and transportation milestones are shared in near real-time.

Additional data is not only a way to make sure that accurate risk assessments are being made, but it can also help decrease the burden placed by the bureaucracy related to importing or exporting goods. Increasing the accuracy of the inspection of goods, can enable authorities to focus their resources on the most important targets and improve trade documentation processing for reliable shippers, truckers and carriers. Enhancing global trade and the upstream exchange of information can drive growth and prosperity for the entire ecosystem.

Doing more with less

While many technologies and platforms exist in the marketplace, organizations are often constrained by limited public resources that must be utilized wisely. TradeLens does not aim at replacing existing systems but enhancing them with additional data from the supply chain. The TradeLens Platform provides a forum for authorities to run pilots and test innovative solutions in a true end-to-end shipment lifecycle.

In order to contribute to the logistics operations of the entire ecosystem, customs authorities can send notifications related to their inspection and release activities to TradeLens. This information will be made available in near real-time to all the players involved in the shipment and permissioned to see the data.

Several countries have already started using TradeLens to improve their access to valuable information that will in turn support their mission goals:Indonesia, Ukraine, Saudi Arabia, Thailand, Jordan and Azerbaijan.

Source: TradeLens, 28 May 2020

Guide: Goods and Conveyance Reporting in South Africa

A companion guide in support of increased compliance in the reporting of goods and conveyances (RCG) to Customs, South Africa.

Necessary information for – Air, Sea and Road carriers, vessel’s agents, NVOCCs, freight forwarders, Air and Sea terminal operators, container depot operators, transit shed operators and de-grouping depots. Also, all private software service providers to the trade.

The guide offers easy navigation through –

  • registration and electronic trading with SARS Customs
  • the various electronic messages mandated by law, covering import and export movements, across all modes of permissible international transportation
  • message types for each transaction type
  • scenarios to facilitate easier understanding across operators in the supply chain on how the various electronic reports are sequenced, ensuring that Customs formulates a comprehensive end-2-end view of a international trade transaction
  • reference webpages, official notifications, Customs rules and other pertinent information concerning cargo reporting.

All information is hyperlinked to SARS documentation, found on the official SARS website www.sars.gov.za

You may download the Guide below (File size: 3MB)

ICD 2020 – #MakeTradeWork

Picture courtesy of the WCO

To mark International Customs Day 2020 – focusing on the theme of ‘fostering Sustainability for People, Prosperity and the Planet’, the following article from the Spring 2018 edition of World Trade Matters by Jan Hoffmann, the Chief of the Trade Logistics Branch, Division on Technology and Logistics at UNCTAD, is relevant. The article discusses global trade facilitation reforms, the digitalisation of trade and measures towards ensuring long-term sustainability in the maritime industry. 

Confronted with growing populism and a surge in protectionist measures recorded by the WTO, policy makers and enterprises are struggling to avoid a backlash in international trade. At UNCTAD’s Trade Logistics Branch, we support these endeavours by helping to make trade work better. Through trade facilitation reforms, the promotion of digitalisation, and ensuring the long-term sustainability of international transport, we aim at ensuring that the international movement of goods is not confronted with unnecessary obstacles and costs. 

A multilateral agreement to facilitate international trade

Under the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), developing countries commit to implement a number of very practical measures that make trade easier and more transparent. Countries are obliged to publish duties and procedures on the web, traders can transmit their declarations prior to the arrival of the goods, payments can be made electronically, and fees and charges must not become hidden taxes to generate income for the government. These are but some of the 37 concrete measures grouped into 12 Articles of the TFA. They are all useful and help make trade more efficient. 

However, many of these measures involve an initial investment or reforms that require human and financial resources to start with, which developing countries many not have. The good news is that the TFA also includes a novel mechanism – the so called “Special and Differential Treatment” – that helps developing countries plan and acquire the necessary capacity prior to being fully committed to comply with all 12 Articles. Concretely, the mechanism puts the developing countries in the position – and obligation – to analyse and notify their own implementation capacity. At UNCTAD, we are working closely with the developing countries to enable them to do so. Our main counterpart in this endeavour are the National Trade Facilitation Committees (NTFCs) that each country must set up under the TFA. UNCTAD’s Empowerment Programme for NTFCs includes training and knowledge development for the members of the NTFC, combined with advisory services and the development of a Roadmap of TFA implementation. 

By the same token, UNCTAD also supports developing countries in setting up Trade Information Portals. Under the TFA, members of the WTO are obliged to make relevant information on tariffs and trade procedures available on-line. UNCTAD’s Trade Information Portals not only help countries become compliant with this obligation, but in the process of analysing and publishing applicable trade procedures, a Trade Information Portal effectively helps countries identify the potential for the further simplification of procedures. Thanks to these new insights, NTFCs can then develop programmes and reforms that subsequently ensure the further simplification of procedures. 

Technological progress will never be as slow as today

My favourite provision of the TFA is Article 10.1., as it provides for a dynamic dimension of the Agreement. According to this article, countries need to minimize “the incidence and complexity of import, export, and transit formalities”, continuously “review” requirements, keep “reducing the time and cost of compliance for traders and operators”, and always choose “the least trade restrictive measure”. As such, even if a country is compliant with all TFA provisions today, countries will need to continue monitoring if existing procedures are still appropriate in view of technological or regulatory developments. 

As trade becomes increasingly digitalised, and new technologies which do not yet exist will be developed, it will be important that governments continuously revise and review the applicable rules and regulations. 

Digitalisation comes in stages. First, we optimize existing procedures, making use of cargo tracking, the Internet of Things, blockchain et al. Second, new businesses are developed which could not exist without the new technologies; new platforms come into being and we see more “uberisation”. Finally, there is transformation and science fiction; still in our lifetime Artificial Intelligence will overtake human capabilities to manage international trade and its logistics. 

But let us take one step at a time. At UNCTAD, we support developing countries through eTrade readiness assessments, the development and upgrade of technological solutions in Customs automation and Single Windows, and by providing a Forum for our members to analyse and discuss the challenges that come with digitalisation. We encourage the development of global standards that allow for interoperability among new systems. The challenge for policy makers it to encourage private sector investments in new technologies and solutions, while ensuring that no new monopolies emerge that might exclude smaller players.  

And it has to be sustainable

While we aim at ensuring continued growth in international trade, there is a catch. The transport of this trade encompasses increasing externalities, such as pollution, green-house-gas emissions, and congestion. 

Ports need to minimise social and environmental externalities. Many port cities are among the most polluted places to live, as ships burn heavy oil, and delivering trucks produce noise and cause traffic congestions. In addition, ports need to be resilient in the face of disruptions and damages caused by natural disasters and climate change impacts. 

International transport, including shipping, needs to play a larger role in addressing global warming and contribute to mitigating the carbon emissions that are causing climate change. Shipping emits less carbon dioxide (CO2) per ton-mile than other modes of transport, but then due to its sheer volume it also produces many ton-miles. Would it be possible that the industry could be charged by its main regulatory body not per ship tonnage (as is currently the case), but per tonne of CO2 emission? 

Currently, the International Maritime Organization is funded proportional to the tonnage registered under the members’ flags. Like this, Panama, Marshall Islands and Liberia pay for the largest share of the IMO budget – and in the end, this is passed on to the ship-owner, who in turn passes this on to the shipper, who will charge the consumer. This is a good established mechanism that could be expanded to also internalize the external costs of CO2 emissions. 

Being the most globalized of all businesses, maritime transport should consider adopting a global regime that helps further internalize its environmental externalities – to ensure prosperity for all.  

It is all about efficiency

Investing in trade facilitation reforms, making intelligent use of the latest technologies, and ensuring that externalities are internalized are all several sides of the same coin. Trade efficiency is necessary to promote an open international trading system. It requires a continuous effort by policy makers to continuously review current procedures, apply the most appropriate technological solutions, and support an efficient allocation of scarce resources. 

Source: Jan Hoffman, UNCTAD – originally published in World Trade Matters, Spring Edition, 2018

Embracing Blockchain for Cross-border Trade

In August of 2019, both the United States and Thailand announced their plans to test blockchain applications for tracking and managing shipments. The U.S. Customs and Border Protection (CBP) is planning to test a blockchain application against their current system to determine how distributed ledger technology (DLT) can improve its existing processes. Thailand, on the other hand, plans to use IBM’s blockchain-based logistics platform Tradelens to improve customs processes such as data sharing.

Originally developed in a joint venture between IBM and logistics giant Maersk, Tradelens seeks to streamline processes in the global shipping industry by making the flow of information occur in real-time. The blockchain platform is reported to currently process about half of the world’s shipping data.

These moves highlight countries’ increasing interest in employing blockchain technology in their customs and border operations. The Tradelens website says its ecosystem comprises over 100 different organizations including carriers, ports, terminal operators, third-party logistics firms, and freight forwarders. More specifically, a map on the Tradelens website suggests that about 60 ports and terminals worldwide are directly integrated with TradeLens.

Elsewhere, the Directorate-General for Taxation and Customs Union (TAXUD), which develops policies and operational systems for the European Customs Union, explored the applicability of blockchain in customs and taxation with a focus on utilizing blockchain as a notarization service.

The Union is looking into using blockchain to digitize ATA Carnet, an international customs document used in 87 countries for temporarily admitting goods duty-free. A pilot project conducted in collaboration with the International Chamber of Commerce World Chambers Federation (ICC WCF), was successfully tested in 2018. 

The ICC WCF, a body of the ICC that helps facilitate mutually beneficial partnerships between ICC members, has been working with different customs authorities to develop solutions for converting ATA Carnets into electronic documents.

About 80 countries around the world have developed authorized economic operator (AEO) programs and signed a mutual recognition agreement (MRA), all in an effort to streamline cargo security. Under such arrangements, individual countries identify and approve trustworthy logistics operators that pose a low risk in security and share the approval information with participating countries. 

This allows countries to piggyback on the security checks of other countries to make customs operations more efficient. However, a few problems have arisen with the program. 

  • There are information leakage risks associated with the conventional way of sharing AEO data by email. While a sender’s email server may be encrypted, there is no guarantee that the receiver’s is as well, and vice versa.
  • Data sharing is not real-time, but monthly or at an agreed-upon interval. This limits the speed at which information on new or suspended AEOs can reach all participants.

To avoid the aforementioned problems as well as achieve additional time and cost savings on security procedures, customs administrations in Mexico, Peru and Costa Rica are working with the Inter-American Development Bank to develop a blockchain application called Cadena.

The move by governments around the world to employ blockchain to improve cross-border trade marks a step toward paperless customs processes, which originally began with the digitization of information flows by making trade-related data and documents available and exchangeable electronically. For all the improvements they’ve brought to paper-heavy processes, traditional electronic data exchange systems still face the challenges of authenticity and the unavailability of real-time data exchange.

For instance, the Netherlands and China launched a five-year project in 2010 to test the applicability of electronic sanitary and phytosanitary (SPS) certificates. A World Economic Forum white paper titled “Paperless Trading: How Does It Impact the Trade System?” noted that concerns around the authenticity of the electronic documents arose. This necessitated the adoption of electronic signature systems and a whole new legal framework that recognized the electronic signature.

Still, the entire process requires longer procedures and the introduction of new types of intermediaries — e-signature providers, for instance. Moreover, low-income countries, the trade costs of which remain high compared to high-income countries as according to World Bank data, may not have the budget to implement several new systems for data and document digitization. They still need to invest in better customs infrastructure. 

Blockchain, on the other hand, if implemented in border protection, will ensure real-time availability and immutability of customs documents while saving considerable costs on excessive paperwork.

Source: Original article titled: “Blockchain Adoption as a Cure for Cross-Border Trading“, authored by Craig Adeyanju, Cointelegraph.com, 2019.09.28