U.K. Starts Research on Brexit Customs System Due in Four Months

Marcin Jozwiak – Uplash

The British government has started to conduct research on its new post-Brexit customs IT system, with four months left before the service is due to go live.

Her Majesty’s Revenue & Customs, which is in charge of handling the new customs paperwork that will apply to UK-EU trade from 2021, has invited hauliers to participate in rounds of remote-user testing in the coming months for its Goods Vehicle Movement Service (GVMS), according to a memo to the freight forwarding industry.

The GVMS – which is set to be used to police cross-Irish Sea trade from Jan 1 2021, and then all UK-EU goods flows from July – will give freight companies a unique reference number that proves that they have filed the necessary post-Brexit paperwork, such as customs declarations.

Without a reference from the GVMS, trucks will not be allowed to cross between the UK and EU.

The fact that the GVMS is still in the research and design phase less than 90 working days before it is due to be introduced is a cause for concern in the logistics industry: one freight forwarder, who spoke under condition of anonymity, said they are worried the service won’t be completed and functional on time.

The new system will be required even if Britain and the EU sign a free-trade agreement.

And while consultation with the industry is welcome, it would have been preferable to do such research during the system design process, said Anna Jerzewska, founder of Trade and Borders, a customs and trade consultancy.

“The Government has made it clear that GVMS is unlikely to be ready for January 1 and as far as we understand there will be back-up procedures in place,” she said.

“It will be crucial to ensure that such alternatives are available in places where traffic management will be important,” she said, citing Kent and the Irish Sea.

In the memo, HMRC says it wants to start the first round of testing “ASAP” due to the shortage of time.

The tests will involve hour-long video calls where hauliers try prototypes and give feedback.

“When designing a system that the industry will be using, it is important we work in partnership with them to make sure it suits their and our needs,” HMRC said by email.

“We will continue to develop our systems in readiness for the end of the transition period and when full border controls are implemented from July 2021.”

Source: Bloomberg, article authored by Joe Mayes, 28 August 2020

World Bank suspends ‘Doing Business’ rankings after fraud

The World Bank has suspended its Doing Business report, which ranks countries based on the costs of doing business. It is the latest crisis to beset the institution.

“A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports,” the global institution said in a statement on August 27.

The institution said it had informed the authorities of the most affected countries, but did not name them. “We will act based on the findings and will retrospectively correct the data of countries that were most affected by the irregularities,” the statement added.

The Wall Street Journal reported that data on China, Azerbaijan, the United Arab Emirates and Saudi Arabia “appeared to have been inappropriately altered.”

If confirmed, the revised data could affect the rankings of the five countries. The latest report, for example, showed vast improvement among Middle Eastern economies with Saudi Arabia climbing 30 places.

The latest report, published last year, ranked Togo and Nigeria among the 10 countries that had shown the most improvement and collectively accounted for “one-fifth of all the reforms recorded worldwide.”

There are no reports that the scores of either country were tampered with.

In the report, only two Sub-Saharan economies, Mauritius and Rwanda, ranked among the top 50. Kenya, South Africa, Zambia, Botswana, and Togo ranked among the top 100 while South Sudan, Eritrea and Somalia ranked among the lowest globally.

The decision to suspend the rankings is also likely to reignite controversy around the annual report, particularly in the methodologies behind the rankings.

In the 17 years it has been published, the Doing Business reports have amassed “surprising influence over global regulatory policies,” researchers wrote in a paper published in 2019. The researchers found that the rankings strongly affect policy as governments make reforms to improve their ranking.

“Changes over time in the Doing Business rankings are not particularly meaningful. They largely reflect changes in methodology and sample—which the World Bank makes every year, without correcting earlier numbers—not changes in reality on the ground,” Researchers at the Center for Global Development wrote in February 2018.

In June, the Bretton Woods institution appointed Carmen Reinhart as its new chief economist. Reinhart’s two predecessors, Penelope Koujianou Goldberg and Paul Romer, resigned after less than two years on the job. Pinelope Goldberg quit in February, effective 1 March.

Romer quit in January 2018 after igniting a controversy around Chile’s ranking in the Ease of Doing Business Report, which he suggested may have been deliberately lowered under the presidency of left-leaning Michelle Bachelet.

The World Bank is also struggling to counter the fallout from the publication of an internal paper that looks at elite capture of foreign aid.

Source: The Africa Report, 28 August 2020

WTO: COVID-19 related restrictions on cross-border mobility are affecting global trade

A new information note published by the WTO Secretariat highlights how trade in goods and services has been affected by temporary border closures and travel restrictions linked to the COVID-19 pandemic.

It describes how the cross-border mobility of individuals plays an important role in both the cross-border provision and consumption of services and in manufacturing value chains.  

The paper notes that sweeping travel barriers introduced in the early stages of the pandemic have given way to more fine-tuned policies aimed at allowing through “essential” foreign workers, or creating quarantine-free “travel bubbles” among partners. Nevertheless, mobility barriers have had a particularly heavy impact on tourism and education services, as well as on trade in goods, due to their effect on transport services and on information and transaction costs.

The paper notes that international cooperation has a potentially important role to play in minimizing the economic impact of mobility restrictions. For instance, exchanging information on lessons learnt about mobility restrictions and trade could help WTO members foster greater resilience in the face of future crises. Such an exercise could help with identifying options to implement travel measures that meet public health protection objectives while minimizing the negative effects on trade.

Key points

  • International trade and investment have always relied on the cross-border mobility of individuals. 
  • To contain the spread of COVID-19, many WTO members imposed temporary border closures and travel restrictions. The severe restrictions on cross-border movement are not motivated by trade considerations but by public health reasons. Nevertheless, they have had a significant impact on trade. In several members, initial sweeping travel barriers have been replaced by more fine-tuned policies, aimed at allowing the movement of “essential” foreign workers, or creating “travel bubbles” permitting quarantine-free mobility among partners. 
  • A significant amount of services trade requires physical proximity between producers and consumers. International mobility to consume or provide services abroad is one way to attain this proximity. Mobility is also important to the operations of services providers who establish a commercial presence in other countries, as well as to those who ordinarily provide services remotely across international borders. 
  • Border measures and travel restrictions have had a particularly heavy impact on sectors such as tourism and education services. COVID-19 has triggered an unprecedented crisis for the tourism sector. In terms of travellers and revenue, international tourism in 2020 is expected to register its worst performance since 1950. In higher education, some institutions are facing a potential drop in international student enrolment of 50 to 75 per cent. 
  • Mobility barriers also significantly affect trade in goods, through their impact on transport services and on information and transaction costs. 
  • Restarting international mobility is unlikely to proceed in a linear fashion. Given the crossborder spill-overs resulting from measures affecting transnational mobility, a case can be made for supplementing domestic action with international cooperative efforts. WTO members may eventually wish to look into building greater preparedness and resilience for future crises, for example starting with information exchange about lessons learnt about mobility restrictions and trade. The exercise could help with identifying ways to implement travel measures that meet public health protection objectives while producing the least trade distortive effects.

The report can be found here!

Source: World Trade Organisation

CITES, WWF and TRAFFIC release new guide to identify smuggled ivory

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) Secretariat, World Wildlife Fund (WWF) and TRAFFIC recently publish the Identification Guide for Ivory and Ivory Substitutesa comprehensive and accessible resource for identifying the most commonly found ivories and artificial substitutes in trade. This is a vital tool to assist law enforcement in identifying trafficked ivory in particular.

CITES Secretary-General Ivonne Higuero stated, “The much-awaited 4th edition of the Guidewill be a key tool in the regulation of the international trade of several CITES-listed species. Through it, we reaffirm our commitment to support CITES Parties to achieve the objectives of the Convention and combat wildlife crime.”

Last reviewed in 1999, more than two decades of advancements have been incorporated into the Guide to help law enforcement agencies distinguish between types of ivories and their substitutes, including detailed graphics and forensic applications for ivory identification. Accurate identification is critical potentially to prevent illegal ivory products from being smuggled or illegally traded and to curb the poaching crisis decimating African elephant populations.

In the past dozen years, there has been a surge in the poaching of elephants for their ivory tusks. In a Decision made at the 17th meeting of the Conference of the Parties to CITES in 2016, Parties agreed that the guide required updating to help with identification of elephant ivory due to the increased enforcement activity and the growing number of substitute ivory types entering the market, making it challenging to determine elephant ivory from other types.

The Guide provides enforcement officers, forensic scientists, online technology company enforcement staff and wildlife trade management authorities with detailed procedures, visual aids and instructions for recognizing ivory products, particularly those that have undergone heavy alterations such as carving and painting.

Ivory products can sometimes be falsely labelled in trade to avoid regulations, particularly to circumvent the international commercial trade ban in elephant ivory. The range of ivories and substitutes can be difficult to recognize without specific equipment, expertise and time-consuming examinations.

The Guide includes updated descriptions of ivories from different species and their products found in trade, and reliable, telltale methods used to determine ivory types depending on the form of product, such as tusk/tooth, carving, or other items.

The new Guide includes details on the most relevant species— elephants, mammoths, whales, narwhals and hippos— as well as more extensive visual materials to aid enforcement officers in identifying elephant ivories from ivory substitutes, such as plastics and vegetable ivory. The Guide also addresses the sale of ivory products online, where an increasing share of illegal elephant ivory trade is now taking place and where identification of static digital images can be challenging.

“Even today, it is still challenging to identify ivory,” said Ginette Hemley, Senior Vice President for Wildlife Conservation at WWF-US. “We are in a time of increased illicit trade in elephant ivory and a proliferation of trade in other ivories, like mammoth and artificial substitutes, that make it difficult to distinguish the origin of the ivory. We must also contend with the flourishing online trade and extensive criminal efforts to avoid detection or to sell fraudulent products.”

Addressing the CoP17 decision, the CITES Secretariat commissioned WWF and TRAFFIC to develop the Guide. Some of the original authors and forensics experts working at the United States Fish and Wildlife Service’s Forensic Laboratory (USFWS) were involved in the update. Additional research on online trade and overall guide production was completed by WWF-US and TRAFFIC. The guide now includes an extract from the UN Office of Drugs and Crime 2014 report, Guidelines on methods and procedures for ivory sampling and laboratory analysis,published in cooperation with the International Consortium on Combating Wildlife Crime (ICCWC). The Guide will be published in Chinese, French and Spanish language versions.

Crawford Allan, Senior Director, TRAFFIC, stated, “The ivory experts from the USFWS Wildlife Forensic Laboratory are commended for updating and expanding the morphology section of this definitive guide.  It will be used in training programs for law enforcement and supporting a wide range of enforcement and conservation applications, including helping online companies with blocking listings of prohibited elephant ivory from their platforms. Ramping up the pressure is vital to keep illegal trade in ivories in check.”

This publication was made possible with the support from the European Union (through the CITES CoP17 Decisions implementation project).

Source: CITES

WCO 2019 Illicit Trade Report

The WCO has issued its 2019 Illicit Trade Report (ITR), an annual publication which offers a comprehensive study of illicit trade flows through an in-depth analysis of seizure data and case studies voluntarily submitted by Member Customs administrations worldwide. 

The information captured in the ITR provides essential insight into the occurrences of illicit trade, thereby assisting Customs administrations in understanding trends and patters and making enlightened decisions to secure cross-border trade. The importance of comprehensive data analysis is indisputably a key component to support effective and efficient Customs enforcement activities. 

This year, the analysis provided in this Report is based on data collected from 137 Member administrations and the report consists of six sections: Cultural Heritage; Drugs; Environment; IPR, Health and Safety; Revenue and Security. 

For the fourth year in a row, the WCO has partnered with the Center for Advanced Defense Studies (C4ADS), a Washington, D.C.-based non-profit organization dedicated to providing data-driven analysis and evidence-based reporting, thereby enriching readers’ experience with advanced data visualization technologies and enhanced data analysis.  

Access the 2019 Illicit Trade Report here! (45MB)

Source: World Customs Organisation

Maersk launches Maersk Flow, a digital supply chain management platform

To further assist small and medium sized businesses with the complexity of managing their supply chains, Maersk is launching Maersk Flow – a digital platform which provides customers and their partners with everything they need to take control of their supply chain, from factory to market.

The solution enables transparency in critical supply chain processes and ensures that the flow of goods and documents is executed as planned. It also reduces manual work and costly mistakes, while empowering logistics professionals with all the current and historical data they need to sustainably improve their supply chain.

The daily life of small and medium sized businesses is increasingly global, complex and fast-paced. Every day thousands of products are moving through the supply chain, on multiple carriers, coming from and reaching many supply chain partners and customers. And for many of these companies this complexity is managed fully manually via spreadsheets, emails and phone calls, which despite lots of hard work is leading to reduced visibility and control – and ultimately higher costs or lost sales. With Maersk Flow these companies will be able to take control of their supply chains.

Maersk Flow further extends Maersk’s customer reach and strengthens the company’s position as an industry leader in digital solutions.

Maersk Flow facilitates the uninterrupted flow of information, cargo, and documentation to empower you and your partners to take the right action at the right time. Its unique features give you convenience and bring coherence to your everyday operations, so that you can optimise your supply chain logistics and refocus your resources on delivering value to your customers. The tool will assist with –

  • Purchase Order Management
  • Booking Management
  • Reporting and Performance
  • Document Sharing
  • Visibility

For more information you can visit: https://www.maersk.com/solutions/supply-chain/maersk-flow

South Africa – President signs Border Management Authority Bill into Law

President Cyril Ramaphosa has signed the Border Management Authority Bill of 2020 into law.

The new legislation is in force from today, 21 July 2020.

The legislation addresses a need identified by government and diverse stakeholders in the economy for an integrated and well coordinated border management service that will ensure secure travel and legitimate trade in accordance with the Constitution and international and domestic law. 

The new Border Management Authority will, as an objective of the Act, replace the current challenge of different agencies and organs of government all playing different roles in managing aspects of border control.

The integrated Authority will contribute to the socio-economic development of the Republic and ensure effective and efficient border law enforcement functions at ports of entry and borders.

The new law provides for the establishment, organisation, regulation, functions and control of the Border Management Authority, the appointment of its Commissioner and Deputy Commissioners and officials.

The law also provides for their terms of office, conditions of service and functions and powers.

Furthermore, the law provides for the establishment of an Inter-Ministerial Consultative Committee, Border Technical Committee and advisory committees, for the review or appeal of decisions of officers, and the definition of certain things offences and the levying of penalties.

The legislation therefore contributes to the security of the country and the integrity and ease of trade and the general movement of persons and goods in and out of the country.

Source: The Presidency, Pretoria, 21 July 2020

India revives Preferential Trade Agreement initiative with SACU

Discussions between Southern African Customs Union (SACU) [South Africa, Namibia, Botswana, Lesotho, Eswatini] and India to achieve a Preferential Trade Agreement (PTA) have been revived with the two sides holding a virtual meeting last week to discuss various aspects of the PTA. 

The Indian side at the dialogue was led by Srikar Reddy, Joint Secretary, Department of Commerce while SACU was led by Amb. Steve Katjiuanjo, Executive Director, Ministry of Industrialization,Trade and SME Development of Namibia. 

Reddy underlined India’s historically close ties with Southern Africa and its steadfast commitment to deepen economic engagement with this region. He informed that in 2019-20, trade between India and Africa as a whole stood at $ 66.7 billion, of which the India-SACU trade was $ 10.9 billion with an immense potential to expand further. 

Amb Katjiuanjo called India as a strategic partner for SACU. Trade is currently in SACU’s favour, thus showing that the region is benefiting from access to the vast Indian market. 

Prashant Agrawal, High Commissioner of India to Namibia, said on the occasion that in these unprecedented times of Covid-19 pandemic and its economic challenges, economies of the region, including of Namibia, could vastly benefit by enhanced trade and commercial links with India’s $ 2.9 trillion economy. 

India stood fully committed and ready to support manufacturing and industry in Namibia in areas such as agriculture, irrigation, renewables, ICT, pharma and medical supplies. Both sides reviewed the progress made and discussed steps to quickly move forward on the PTA. 

India-Namibia bilateral trade during 2018-19 was $ 135.92 million with India’s exports valued at $ 82.37 million, while India’s imports stood at $ 53.55 million. Mining sector is an area of mutual interest. Namibia is rich in uranium, diamonds, copper, phosphates and other minerals. Indian technological prowess in IT, engineering, pharmaceuticals, railways and SMEs is of interest to Namibia. Bilateral cooperation in the energy and agricultural sectors also has good prospects. 

Meanwhile exports from India to South Africa include vehicles and components thereof, transport equipment, drugs and pharmaceuticals, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, gems and jewellery, etc. Imports from South Africa to India include gold, steam coal, copper ores & concentrates, phosphoric acid, manganese ore, aluminium ingots & other minerals. India-S Africa bilateral trade was $ 10,584.5 million during 2018-19. 

Source: India Times, 19 July 2020

Kazakhstan, “My Faithful Friend” wins the 2020 WCO Photo Competition

A photo submitted by Kazakhstan Customs, as part of the annual WCO Photo Competition, has been voted as the winner of the competition 2020 edition. The aim of the competition is to provide the WCO Members with a means to showcase their Administration’s history, activities and successes.

The winning photo shows a Customs officer in uniform alongside his faithful friend, ready to start the day despite the risks posed by the spread of COVID-19. 

The WCO Secretariat wishes to congratulate the winner and thank all 58 Customs administrations which took part in the Competition this year, as well as the 76 Members having voted for their favorite photos.

See all the entries for 2020 here!

Source: World Customs Organisation

Tanzania – Electronic Tax Stamp Pushes Up Revenue By 34%

THE use of Electronic Tax Stamps (ETS) for excisable goods have contributed to a 34 percent increase in revenue collected on branded products.

Due to the increase, the Tanzania Revenue Authority (TRA) has already rolled out the second phase which saw ETS being stamped on soft and carbonated drink plus bottled water.

TRA Deputy Commissioner General, Mr Msafiri Mbibo made the remarks during the on-going 44th Dar es Salaam International Trade Fair (DITF).

Mr Mbibo said since the system was introduced it has proven success showing improvement in revenue collections in which there is an increase of 34 percent.

ETS replaces the former paper stamp system, which was cumbersome and prone to human error, allowing certain tax-related malpractices to slip through the cracks.

This is one of the government’s moves geared towards improving tax administration in the country.

“We are glad that ETS shows improvement in the collection of excise duty and Value-added Tax (VAT), in the first quarter of the 2019/20 financial year the collection rose to 35.3 per cent on domestic spirits and wines compared to the corresponding period of last year,” he noted.

The taxman garnered 25.8bn/-as excise duty and VAT from domestic spirits and wines during the first quarter of the 2018/19 fiscal year, but the amount rose to 34.96bn/- during the first quarter of the 2019/2020 financial year.

Excise duty and VAT on cigarettes rose by 5.6 percent during the first quarter of the 2019/2020 financial year compared to a similar period last year.

TRA collected 56.7bn/-as excise duty and VAT on cigarettes from July to September 2019, a 3bn/-increase from a similar period of the previous financial year.

For the soft drinks, the amount collected as excise duty and VAT during the two months of August and September 2019 was 18 percent, higher than what was garnered during a similar period in 2018.

TRA collected 16.155bn/-in excise duty and VAT on soft drinks in August and September 2018, but the amount rose to 19.05bn/-during the period between August and September 2019.

Mr Mbibo said ETS has helped to eliminate counterfeit products from the market. It is, nonetheless, a promising move by the Government, and manufacturers and intellectual property owners should have reason to smile.

Commenting on how TRA is planning to ensure the surge the tax base, Mbibo said they will continue to develop friendly tax collection mechanisms so that everyone can enjoy voluntary taxation.

ETS first phase commenced on 15 January 2019 and affected cigarettes, wines, spirits, beer and all other alcoholic beverages.

The second phase began on 1 August 2019 and applied to products such as sweetened or flavoured water and other non-alcoholic beverages, except for fruit or vegetable juice.

The Regulations require each manufacturer to install an electronic tax stamp management system.

A Swiss-based firm SICPA has been contracted by the Tanzania Revenue Authority (TRA) to install and enroll all manufacturers, producers and importers onto the system.

Source: Daily News (Tanzania), 8 July 2020

Maersk to acquire KGH Customs Services

A.P. Moller – Maersk will acquire Sweden-based KGH Customs Services for 2.6 billion Swedish crowns ($281 million), the company announced Monday.

KGH specializes in trade and customs management services in Europe across multiple freight modes. The deal adds to Maersk’s service offerings as the carrier looks to expand beyond ocean shipping and position itself as a full-service supply chain solutions provider.

“There are no end-to-end solutions without customs clearance,” Vincent Clerc, CEO of ocean and logistics at A.P. Moller – Maersk, said in a statement. “With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers´ end-to-end supply chain needs.”

Maersk has been open about its ambitions to expand its business into other parts of the supply chain, positing its logistics sector growth as a main business objective.

“Focus remains on developing our end-to-end offering through an even stronger Ocean product while expanding and scaling our logistics and services portfolio,” Maersk wrote in its latest annual report.

Maersk began outlining its end-to-end ambitions in 2016 and has taken multiple steps toward realizing its goal in the form of deals and reorganization. Last year, Maersk closed a deal to acquire the New Jersey-based customs broker Vandegrift. And in 2018, it announced plans to merge its operations with Damco.

Maersk sees its ocean business as the “strong foundation” for the rest of its logistics offerings, and new products will be important in adding to its end-to-end logistics offerings, the company explained in its latest annual report.

“The next phase in the strategy is about growing the business by innovating existing products combined with selling landside logistics products to our existing customers – as well as growth in our Terminals & Towage business,” the annual report reads.

Maersk has specifically said M&A would be one tool it would use to achieve its end-to-end initiative, highlighting landside logistics as one space where deals could happen in its annual report. And when the company brought on a new CFO, Patrick Jany, earlier this year, it specifically highlighted his experience with M&A.

Last year, Maersk became the first ocean carrier to offer digital ocean customs clearance, according to a press release. The offering allows shippers to upload declaration paperwork and the carrier can send a notification when the shipment clears customs, according to a video explaining the offering.

Source: 24/7 Customs Broker News, 6 July 2020

Automating global logistics starts with digital documents

Like with most business ecosystems, the functioning of global trade relies on efficient exchanges of information, especially of documents. While industries and ecosystems around the world are now digitizing associated processes and automating the bottlenecks, the business ecosystem of global shipping has been slower to realize innovation and digitization.

Supply chain processes require close coordination among many parties and a major choke point in this process is the requesting and finalizing of bills of lading with ocean carriers. There are many situations which cause even the most straight-forward flows to be disrupted and require multiple versions of documents to be created, reviewed and exchanged until final approval and the final bill of lading submission.

TradeLens Workflows utilize blockchain smart contracts to automate and digitize multi-party interactions — this helps drive efficiencies across supply chains. Let’s take a look at each major element to understand what digitizing document workflows looks like for the shipping industry.

Blockchain as the foundation

The foundation of TradeLens Workflows is a permissioned blockchain which guarantees the immutability and traceability of shipping documents and their processes on the platform. This is a very important building block in providing the trust needed to scale.

The permissioned blockchain transforms some of the basic concepts around business networks — contracts, ledgers, transactions, the flow of assets and identity of participants — and introduces the following:

  • Consensus. Transactions in a blockchain network are first proposed, then consented to by the group, and only then committed to the ledger.
  • Shared ledger. Trust anchors have an exact copy of the ledger.
  • Immutability. When a block is committed it is cryptographically secured with previous blocks in the ledger forming an audit log that becomes the foundation of trust.
  • Accountability: All participants are digitally identifiable, and each blockchain transaction is signed with a permissioned user digital certificate.

Document sharing

TradeLens Document sharing provides a framework for organizing and sharing trade documents related to a host of information such as shipments, consignments and transport equipment. This is all done through permissioned access according to the role of different players and includes security, version control and privacy provisions.

Each trade document is stored on a single stack within the blockchain network, under the control of the operator and accessible only to permissioned parties within a channel. Users can upload, download, view and edit documents as allowed by their permissions and access control on that specific type of document for the trade object in question.

It is important to note, only the hash of a given document is stored on the ledger. The document itself is stored securely where access is granted according to the TradeLens Data Sharing Specification. Each time a document is edited or uploaded, a new version is created and added to the document store. Every version can be verified against a hash of its original submitted content in the ledger.

Blockchain ensures the immutability and auditability of all these documents, promoting trust and alignment across trading partners.

Beyond document sharing

The TradeLens Workflow feature takes thedocument sharing capability one step further. It provides a way to interpret structured documents and take actions on them according to well-defined workflows. In other words, by understanding the purpose and contents of documents we can automate certain actions and notifications in the shipment flow.

As documents are submitted through the TradeLens API or UI, they are interpreted by looking at specific attributes that determine which trade object the document is applicable to, and which actions to perform. The actions are checked against defined rules and only specific actions by specific actors are accepted.

When all requirements are fulfilled, the document is saved and the appropriate action gets recorded as a transaction on the blockchain. Smart contracts ensure the state and progression of a TradeLens Workflow — what can be done at each step, and by which organization or actor.

Our workflows also update generated events to help notify subscribers (members of the supply chain) of the actions and results.

An example of TradeLens Workflow: SI-BL Flow 

Let’s talk about a specific TradeLens Workflow — the SI-BL. This variation simplifies the process of sending a shipping instruction (SI) to the ocean carrier and receiving back a verified bill of lading (BL). The TradeLens SI-BL Workflow removes the need to manually edit, amend and transfer these critical documents, accelerating end-to-end flow to achieve a final bill of lading.

When a shipper (or their representative) submits a SI to the TradeLens Platform, it is analyzed by its attributes to determine which consignment it’s related to and which ocean carrier should be notified. Once the carrier has it, a draft BL is submitted back to the platform, the shipper can review and make amendments and share back to the carrier and so on, until a final BL is agreed upon. Because this is an automated process between systems at the shipper and carrier, manual tasks are eliminated along with their inherent delays.

There are many other variations of this flow, but the benefits come from the visibility and increased speed in processing these transactions. Also helpful for shippers, this offers a single mechanism and process for interacting with different ocean carriers with an immutable, shared audit trail for all draft BL revisions and approvals — all recorded on the blockchain ledger.

A digital ecosystem to meet old and new challenges

TradeLens Workflows help connect your ecosystem, drive information sharing and foster collaboration and trust by enabling the digitization and automation of how you work with others.

Source: Article by Ana Biazetti, TradeLens, May 22, 2020

Brazil launches first ever nation-wide Time Release Study

On 30 June 2020 the Secretariat of the Federal Revenue of Brazil (Receita Federal do Brasil), launched its first ever nation-wide Time Release Study (TRS) during an online live broadcasted event attended by over 4000 participants – including border agencies and the private sector, as well as Customs administrations from across the globe. The TRS, which follows the World Customs Organizations (WCO) TRS Methodology, constitutes a milestone for the Brazilian Customs Administration as it enhances transparency while providing an opportunity for an evidence based dialogue between all key stakeholders to tackle the identified bottlenecks and improve the effectiveness and efficiency of border procedures.

The TRS report was validated by the WCO in collaboration with the World Bank Group and with support of the UK’s Prosperity Fund. Speaking at the Opening Session of the launch event, WCO Deputy Secretary-General, Ricardo Treviño Chapa said: “This is a big step forward towards increased trade facilitation and provides a baseline to measure the impact of actions and reforms”. He also underlined that the Brazilian experience would be valuable to share with the wider Customs community and added that “the current health emergency shows that it is key to keep the flow of goods going”. Throughout the event the importance of the WCO’s TRS methodology was highlighted by various speakers as a vital tool for strategic planning and the implementation of the WTO’s Trade Facilitation Agreement. 

The study shows an average time measured of 7.5 days considering air, sea and road modes of transport. The Customs clearance stage accounts for less than 10% of the total time measured, while those actions under the responsibility of private agents represent more than half of the total time spent in all flows analysed. 

To further increase transparency for importers and exporters, the Secretariat of the Federal Revenue of Brazil also intends to publish the raw data of the TRS.

The recording of the full launch event with Portuguese/English translation can be watched here (YouTube).

The TRS report and its Executive Summary are available here.

Source: World Customs Organisation

Illicit cigarette use declines in EU but production rises

The consumption of illicit cigarettes fell below 8 per cent of total cigarette use last year, but was still equivalent to nearly 39bn smokes and €9.5bn in lost tax revenues, says a new report.

The latest edition of the annual study – carried out by KPMG on behalf of tobacco giant Philip Morris International – also found that imports of illicit cigarettes from non-EU countries such as Ukraine and Belarus declined in 2019, with law enforcement reports suggesting there are “increasing volumes from illegal factories within the EU.”

Illicit ‘whites’ with no country specific labelling – i.e. legally produced cigarettes that are smuggled and traded illegally, often through free trade zones (FTZs) – remain the largest element of the counterfeit and contraband (C&C) category, representing 23.1 per cent of total EU illicit consumption or 9bn cigarettes.

Counterfeit of brands owned by manufacturers participating in empty pack surveys grew to 7.6bn cigarettes, an increase of more than 38 percent over 2018’s figure, and is the highest level ever recorded by KPMG. Counterfeit consumption was the highest in the UK and Greece.

The overall picture is one of increasing sophistication by the criminal networks behind the illicit trade, with multiple production units to compensate if one is raised, and increasingly high tech manufacturing equipment. New groups are also emerging that are focusing specifically on smuggling raw and fine cut tobacco.

“Illicit manufacturers are producing counterfeit, established and new illicit white brands to order at scale for organisations and smugglers who can arrange distribution of large volumes, either in large shipments or increasingly via high frequency, low volume shipments,” says KPMG.

Criminal groups are exploiting new distribution channels, such as rail, as it is faster than traditional shipping routes, as well as courier packages which are small and hard for law enforcement to detect, according to the report.

“The continued decline of illicit tobacco trade in the EU is a positive development and reinforces the importance of supply chain control measures, strict enforcement, and collaboration in combating this issue,” said Alvise Giustiniani, vice president of Illicit Trade Prevention at PMI.

However, while considerable efforts have taken place to stem contraband cigarettes from flowing into the EU, “we are once again seeing criminal organisations shifting their operations to stay one step ahead of anti-illicit programmes, according to the company.

Source: Phil Taylor, Securing Industry, 26 June 2020

COMESA – Electronic Certificate of Origin (eCO)

Kenya is among 15 African States that have agreed to pilot a new project seeking to ease movement of goods within the region’s trading bloc.

The electronic certificate of origin (eCO) System, developed under the Common Market for Eastern and Southern Africa (Comesa) digital free trade area will fast-track movement of goods, enhancing intra-regional trade.

The new plan will do away with registration, application and submission of certificates for post-verification of goods.

Certificates of origin are issued to exporters within the Comesa Free Trade Area (FTA) to confer preferential treatment to goods originating from an FTA member State.

Truckers issued with eCO certificates will no longer stop to undergo an audit of their cargo via a manual verification process.

Comesa trade and customs director Christopher Onyango said the pilot was launched after last week’s meeting where member States agreed to develop national piloting plans to ensure that electronic certificates are implemented as soon as possible.

“The emergence of the Covid-19 pandemic calls for speedy implementation of the Comesa eCO by all member States,” said Dr Onyango, adding that eCO will spur intraregional trade and attract more investments into the region.

Other countries involved in eCO are Burundi, DR Congo, Egypt, Eswatini, Ethiopia, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Tunisia, Zambia and Zimbabwe.

Adoption of eCo that replaces manual certificates follows increased restriction on movement of cargo across borders due to the Covid-19 pandemic.

“It is rather disheartening that despite the preferences offered under the FTA, intraComesa is at eight percent of total trade, compared to Africa’s 15 percent, America’s 47 percent, Asia’s 61 percent and Europe’s 67percent,” Dr Onyango noted.

A technical working group (TWG) on rules of origin (RoO) is engaged on easing rules to facilitate implementation of the Comesa eCO and other trade facilitation instruments.

The director urged the team to consider making the rules simple, transparent and predictable to enable businesses to thrive.

“RoO … are not just the passport for circulating goods under preferential tariffs but are as well the cornerstone behind effective application of preferences towards member States,” said Dr Onyango.

He observed that when the RoO are too costly to be implemented by firms relative to the expected benefits, exporters would rather pay tariffs than comply with strict rules of origin, leading to low utilisation.

According to the Kenya Economic Survey 2020, Kenya’s high appetite for imported goods saw it sink into a trade deficit with Africa for the first time in more than two decades.

Kenya’s import bill from other African countries rose to Sh234 billion last year, an 11 percent increase from the Sh210 billion spent in 2018 while export receipts rose by a paltry three percent to Sh224 billion in the year.

The increased consumption of foreign goods pushed the balance of trade to a deficit position of Sh9 billion.

“Imports from Africa rose by 11.4 percent to account for 13 percent of the total import bill, attributed to increased imports from South Africa,” the survey states.

Source: Business Daily Africa, 24 June 2020