Archives For International trade

TradeLens

Maersk and IBM have introduced their global blockchain solution TradeLens, with 94 organizations already participating. The companies announced their joint venture in January this year after collaborating on the concept since 2016.

Early adopters include more than 20 port and terminal operators across the globe, including PSA Singapore, International Container Terminal Services Inc, Patrick Terminals, Modern Terminals in Hong Kong, Port of Halifax, Port of Rotterdam, Port of Bilbao, PortConnect, PortBase and terminal operators Holt Logistics at the Port of Philadelphia. They join the global APM Terminals’ network in piloting the solution at over 230 marine gateways worldwide.

Pacific International Lines has joined Maersk Line and Hamburg Süd as global container carriers participating. Customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru are participating, along with customs brokers Ransa and Güler & Dinamik.

Participation among beneficial cargo owners has grown to include Torre Blanca / Camposol and Umit Bisiklet. Freight forwarders, transportation and logistics companies including Agility, CEVA Logistics, DAMCO, Kotahi, PLH Trucking Company, Ancotrans and WorldWide Alliance.

TradeLens uses IBM Blockchain technology built on open standards to establish a single shared view of a transaction without compromising details, privacy or confidentiality. Shippers, shipping lines, freight forwarders, port and terminal operators, inland transportation and customs authorities can interact via real-time access to shipping data ad shipping documents, including IoT and sensor data ranging from temperature control to container weight.

Using blockchain smart contracts, TradeLens enables digital collaboration across the multiple parties involved in international trade. The trade document module, released under a beta program and called ClearWay, enables importers/exporters, customs brokers, trusted third parties such as Customs, other government agencies, and NGOs to collaborate in cross-organizational business processes and information exchanges, all backed by a secure, non-repudiable audit trail.

During a 12-month trial, Maersk and IBM worked with dozens of partners to identify opportunities to prevent delays caused by documentation errors and information delays. One example demonstrated how TradeLens can reduce the transit time of a shipment of packaging materials to a production line in the U.S. by 40 percent, avoiding thousands of dollars in cost.

Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container” from 10 steps and five people to, with TradeLens, one step and one person.

More than 154 million shipping events have been captured on the platform, including data such as arrival times of vessels and container “gate-in,” and documents such as customs releases, commercial invoices and bills of lading. This data is growing at a rate of close to one million events per day.

TradeLens is expected to be fully commercially available by the end of this year.

Source: Maritime Executive, original article published 2018-08-09

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The first full agricultural commodity transaction using a blockchain platform has been completed by Louis Dreyfus Company (LDC), Shandong Bohi Industry, ING, Societe Generale and ABN Amro.

The trade included a full set of digitalized documents (sales contract, letter of credit, certificates) and automatic data-matching, thus avoiding task duplication and manual checks. Time spent on processing documents and data was reduced five-fold. The companies involved said that other benefits included the ability to monitor the operation’s progress in real time, data verification, reduced risk of fraud and a shorter cash cycle.

In the test, the Easy Trading Connect platform was used to execute a soybean shipment transaction from the U.S. to China. The transaction involved user participation on the blockchain-based platform by teams from Louis Dreyfus Company as the seller and Bohi as the buyer, with banks issuing and confirming the letter of credit. Russell Marine Group and Blue Water Shipping also participated in the process, issuing all required certificates. The U.S. Department of Agriculture provided valuable insights on how to include phyto-sanitary certificates in the process.

The Easy Trading Connect platform was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer blockchain-based services to the energy sector. The same principle was then applied to develop a blockchain-based platform tailored to agricultural commodities trading.

ING, Societe Generale, ABN Amro and other major industry players such as LDC have a long-term ambition to improve security and operational efficiency in the commodity trading and finance sector through digitalization and standardization.

“One thing is clear: the digital revolution is transforming the commodities sector,” said Gonzalo Ramírez Martiarena, Chief Executive Officer of LDC. “Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result. The next step is to harness the potential for further development through the adoption of common standards, and welcome a truly new era of digital trade flow management on a global level.”

Source: Maritime Executive, 3 January 2018 (Image credit: David Hundley (LDC)

Irish flag

Following Britain’s recent utterances that it will not rule out the possibility that the EU may retain oversight of customs controls at UK borders after it leaves the bloc, the Irish government has warned UK authorities it will not be used as a “pawn” in Brexit negotiations, reports News Letter, UK.

Foreign Affairs Minister Simon Coveney said he does not want the issue of the Irish border to be used by the UK government as a tool to pressurise the EU for broader trade agreements.

Mr Coveney also said that sufficient progress on the future of the Irish border has not been made during Brexit talks.

Speaking ahead of a meeting with Northern Ireland Secretary of State James Brokenshire in Dublin on Tuesday Mr Coveney said: “We do not want the Irish issue, the border issue, to be used as a pawn to try to pressurise for broader trade agreements.”

He added: “Sufficient progress (on the issues facing the island of Ireland post-Brexit) hasn’t been made to date.”

He warned that in order for Brexit negotiations to move onto the next phase “measurable and real progress” is needed.

Before the meeting Mr Brokenshire insisted there was no possibility of the UK staying within a customs union post Brexit.

He said that to do so would prevent the UK from negotiating international trade deals.However, following a meeting with the Irish and British Chamber of Commerce he said there would be a period of implementation where the UK would adhere closely to the existing customs union.

“We think it is important there is an implementation period where the UK would adhere closely to the existing customs union,” said Mr Brokenshire. “But ultimately it is about the UK being able to negotiate international trade deals.

We want to harness those freedoms. If we were to remain in the customs union that would prevent us from doing so. “We are leaving EU, customs union and single market. We have set out options as to how we can achieve that frictionless trade,” he added.

However, Mr Coveney said the Irish Government believes the best way to progress “the complexity of Britain leaving the European Union is for Britain to remain very close to the single market and effectively to remain part of the customs union.”

He added: “That would certainly make the issues on the island of Ireland an awful lot easier to manage. “But of course the British Government’s stated position is not in agreement with that but that doesn’t mean we won’t continue to advocate for that.

“In the absence of that it is up to the British government to come up with flexible and imaginative solutions to actually try to deal with the specific island of Ireland issues.” Source: Newsletter.co.uk, author Mc Aleese. D, August 22, 2017.

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The WCO Private Sector Consultative Group (PSCG) met for the 41st time at the WCO headquarters on 3 and 4 July 2017. The meeting was chaired by Mr. John Mein from PROCOMEX and attended by representatives from 17 of the 21 PSCG members – AAEI, BMW, CATERPILLAR, E-BAY, FIATA, FONASBA, FONTERRA, GEA, HAIER, HUAWEI, IATA, ICC, IFCBA, MICROSOFT, OPORA, PROCOMEX and SAAFF.

During their two-day meeting, the PSCG discussed a number of very topical matters and developments, including current threats of protectionism to free trade, the state of trade facilitation and the implementation of the WTO TFA agreement and e-commerce. WCO members also attended part of the meeting and presented current WCO work programmes, including the upcoming review of the Revised Kyoto Convention and encouraged PSCG members to take an active role in this review work. The Secretary General, Kunio Mikuriya, also addressed the PSCG on its first day on issues relating to the current state of international trade.

Following the PSCG meeting, a dialogue between Policy Commission and PSCG members including Trade Observers was held to discuss current challenges with regard to free trade and globalization.  During break-out groups representatives from both the Customs administrations and private sector discussed the current problem landscape and what the international Customs community can do in collaboration with the private sector to support economic and social development and growth through the application of trade facilitation principles and measures. Source: WCO

icc-2020

Who would have guessed that a collection of three-letter acronyms would have had such an impact on the development of international (and domestic) commercial transactions? A group of industrialists, financiers and traders whose determination to bring economic prosperity to a post-World War I era eventually led to the founding of the International Chamber of Commerce (ICC). With no global system of rules to govern trade, it was these businessmen who saw the opportunity to create an industry standard that would become known as the Incoterms rules.

To keep pace with the ever evolving global trade landscape, the latest update to the trade terms is currently in progress and is set to be unveiled in 2020. The Incoterms 2020 Drafting Group includes lawyers, traders and company representatives from around the world. The overall process will take two years as practical input on what works and what could possibly be improved will be collected from a range of Incoterms rules users worldwide and studied. For more information visit the ICC websiteSource: ICC 

accourt-risk-fraud-managementSenior Claims Executive at the TT Club in Sydney, Kate Hollis, sheds some light on the risks faced by licenced customs brokers and mitigation steps to take:

“As the international trade regulatory landscape continues to change and the commercial environment becomes increasingly competitive, the balancing act for forwarders and customs brokers between providing services to clients and complying with obligations to customs becomes more complicated.

“Customs brokers assume responsibility for acting correctly between cargo interests and customs. As a result, there is the potential to provide advice to customers or carry out actions that result in the cargo interest suffering financial loss, for which you can be alleged to have been negligent. Closely related to the liability exposure of your customer is the potential for customs to levy fines or penalties through infringement notices.

“Identity fraud is perhaps a less obvious area of risk. In some cases authorities find that brokers have committed an offence where checks on the identity of clients have not been performed and that simple verification of the identity would have alerted the broker to the fraud. Consistent with previous advice, we recommend dealing with your clients directly (rather than through an intermediary) and always perform your own background checks, both in regard to the entity itself as well as the statements being made to customs.

“One recent incident saw rice wine being imported into Australia from Korea, but it was declared as apple cider vinegar. This directly resulted in extra costs for handling the container and for storage costs under the customs bond. Following the inspection, duty was charged at the rate for rice wine – not cider – which the freight forwarder pre-paid on behalf of the importer. It proved impossible to reclaim the duty and additional costs because it transpired that the consignee company no longer existed. There have also been cases of people fabricating an identity in an attempt to import goods without paying the full amount of duty. When the companies were not successful, they simply disappeared.

“Customs brokers also need to be aware of the risk of identity theft. While the variety of scams is broad, TT Club has identified three areas that require particular attention for Customs Brokers:

  1. Piggybacking – where an unscrupulous entity uses the identifying details of a legitimate entity on a Cargo Report or Import Declaration, generally with the aim of importing consignments containing illicit substances or smuggled goods.
  2. User access security – the nature of access to customs entry systems and digital certificates means that individual login details need to be carefully guarded to avoid misuse and illegal activity.
  3. Mandate fraud – where fraudulent diversion of payments occurs. It is primarily the responsibility of the party making a payment to ensure that the bank details are correct.

“Customs Brokers should be aware that their licence might be at risk in a situation where the authorities consider that the broker has intentionally or recklessly facilitated a fraud. Such situations can also lead to fines being imposed on the Customs Broker as an individual, as well as actions against the forwarding business as a company.

“Mitigation of these risks is possible. In the first instance, it is important to review your own internal processes and systems. Recognise that the risk exposures are business critical and implement robust technology systems and standard operating procedures accordingly, particularly considering access rights and controls.

“Secondly, ensure that well drafted standard trading conditions are properly incorporated into your interactions with all clients. Many national trade associations provide ideal models You should seek legal advice to ensure that contracts are appropriate for your specific business. A third obvious mitigation is to purchase adequate and appropriate insurance. You should discuss this with your broker to ensure that your specific needs are properly covered.” Source: TT Club

ccsThe Competition Commission of Singapore (CCS) has issued a Proposed Infringement Decision (PID) against 11 freight forwarding companies and their Singapore subsidiaries / affiliates. CCS provisionally finds that the Parties have infringed section 34 of the Competition Act by collectively fixing certain fees and surcharges, and exchanging price and customer information in relation to the provision of air freight forwarding services for shipments from Japan to Singapore.

CCS commenced investigations after receiving an application for immunity under CCS’s Leniency Programme from one of the Parties involved in the alleged cartel. In CCS’s provisional view, information received during the course of the investigation evidences that the Parties were competitors and attended meetings in Japan where they exchanged information, discussed and agreed on certain fees and surcharges in relation to air freight forwarding services for shipments from Japan to other countries, including Singapore. The PID is limited to anti-competitive agreements and/or concerted practices involving the Japan to Singapore route.

The PID is a written notice setting out the facts on which CCS makes its assessment of the Conduct and its reasons for arriving at the proposed decision. It is issued to give the parties concerned an opportunity to respond to the PID and provide any other information to CCS by way of representations. CCS will consider all representations made before deciding whether to issue an infringement decision.

In this regard, all the Parties have 35 working days from the receipt of the PID to make their representations. All the information and evidence put forward by the Parties will be taken into consideration by the CCS should it issue a final decision in relation to the Conduct.

The case is the latest in a long line of investigations into the freight transport sector by competition authorities around the world over the past decade, a process that began with air freight carriers before spreading to freight forwarders, container shipping lines and rail freight operators.

The competition authorities in the US and the EU have issued penalties totaling more than US$2 billion, with the US imprisoning several senior executives judged to have participated in cartel activity. Singapore’s PID is limited to anti-competitive agreements or practices involving the Japan to Singapore route. Source: Competition Commission of Singapore 

WB-GVC Slow Down TradeReal growth in global trade has decelerated significantly since its sharp recovery in 2010. Year-on-year growth in global real trade decelerated from 13.3 percent at the end of the first quarter of 2010, to 9.9, 3.1, and 0.5 percent at the end of the first quarters of 2011, 2012, and 2013, respectively, while picking back up to 3.9 percent in the year leading up to the fourth quarter of 2013. This aggregate deceleration in global trade includes absolute declines in real trade for many product categories and regions. In the wake of the Great Trade Collapse of 2008–9, understanding of the behavior of trade in slowdowns has improved. Among the many explanations offered for the Great Trade Collapse, including explanations related to uncertainty, trade financing, and new protectionist measures by governments, there has been a significant focus on whether the emergence of global value chains (GVCs) in international trade, and their behavior, are a contributing factor in trade slowdowns.

For detailed analysis of the apparel/footwear, electronics, and motor vehicles and related parts industries, download the World Bank report. Source: World Bank

wco news 2013The latest edition of WCO News reflects on the Secretary General’s thoughts on what the WCO has done, what it will be doing, and what will impact on its work in the coming months. The WCO will actively focus its energies on it’s four strategic packages concentrating on revenue, compliance and enforcement, economic competitiveness and organizational development. Together, these packages support the adoption and application of modern Customs practices and raise awareness on the vital role of Customs in international trade.

Featured articles include –

  • From borders to boundless: the digital dilemma in Customs – it discusses two questions – How does an industry traditionally focused on physical borders remake itself for digital commerce, which inherently circumvents such borders? and, Why must Customs agencies transform to address the rise in digital goods and services?
  • Intercepting next generation threats

    For those responsible for the security of our borders, transit networks, VIPs and high-profile sites, the threat posed by more creative adversaries is compounded by the increasing frustrations of passengers and visitors, when subjected to existing security checks. The article discusses a range of ingenuity which technology nowadays provides to these adversaries, and the elements of new Terahertz imaging equipment to assist border agencies in the combat thereof.

  • Beyond the Single 

    Window (SW) – In the 20-plus years since they first opened in Singapore and Sweden, SWs have remained a central focus of border clearance strategies, even though the majority of Customs administrations have not implemented them. Although design plans vary considerably, most SW systems support an electronic data exchange model which allows for (i) Single submission of data and information; (ii) Single and synchronous processing; and (iii) Single decision-making for release and clearance. This article considers 4 best practices which governments should consider when implementing Single Window programs.

The publication also includes country case study’s on Single Window featuring Nigeria and New Zealand, Sri Lanka Customs 20 years of dedication towards conservation, a feature on Argentine Customs and many other interesting articles. To access the publication – click here! Source: WCO

Port of Lagos, Nigeria

Port of Lagos, Nigeria

The following article, allbeit long, provides a good overview of trade facilitation developments in Nigeria. I doubt that there is a single country on the African continent that cannot draw some parallel experience contained in this article.

Trade across borders is not a new phenomenon. But the World Trade Organization is now championing the concept of trade facilitation among nations, which has been defined as simplication , harmonization, standardization and modernization of trade procedures.

Trade facilitation seeks to reduce trade transaction between businesses and government. This concept is receiving unprecedented attention globally and it is at the heart of numerous initiatives within the customs world.

The United Nations Centre for Trade facilitation and Electronic business (UN/CEFACT) in its recommendation No 4 of 1974, said trade facilitation programme ought to be guided by simplication, harmonization and standardization (of trade procedures) so that transaction becomes easier, quicker and more economical than before.

According to the body, there was need to eliminate duplication in formalities, process and procedures; align all national formalities, procedures operation and documentation with international conventions, standard and practices to develop international agreed format for practices, procedures, documentation and information in international trade.

Proponent of trade facilitation believed that if transaction cost in international trade is reduced, there could be creation of wealth, especially in developing countries where red-tapism and other procedural barriers to trade tend to be pronounced.

The organization for Economic Cooperation and Development (OECD) estimated recently that even one per cent reduction in such “hidden cost” would boost the global economy by $40 billion with most of these benefits going to the developing world. Trade facilitation therefore encourages, or perhaps requires countries to adopt means such as publishing their imports and export procedures, reducing the number of forms that importers and exporters are required to complete, allowing forms to be submitted on-line, and checking corruption at border post.

Nigeria, though a signatory to Kyoto 1974 and other convention on trade facilitation, is far from embracing the ideals of the global concept.

The president of the council of Managing Directors of Customs licensed Agents, Mr. Lucky Amiwero, said that although Nigeria was yet to comply with all the provisions of trade facilitation, it has the tools to facilitate international trade, such as the scanning machines and the e-platform.

“In Nigeria, the real cost of doing business is an impediment to trade facilitation. We have no good procedure for goods on transit to Niger and Chad. That has been taken over now by our neighboring countries. One of the key component of trade facilitation is charges which must be tied to services. We have shortcoming in that area. We are still working at cross purposes when other countries are busy harmonizing their import and export procedures”, he said.

In Nigeria, there is no one stop shop process for goods clearance as we have over 10 agencies superintending goods clearing procedure at the nation’s gateways.

“This is very bad and constitute hindrance to trade. The regulatory process is supposed to have been harmonized with other agencies to have a one stop procedures. Procedures are not published and not in line with WTO article which has to do with publication, regulation and administration of procedures. Our trading regime are expensive, our procedures are cumbersome. When others are simplifying and synchronizing their process of import and exports, our import and export procedures are lengthy. We have not been able to harmonise process and procedures and that is where we have a problem. If you still have to go through 100 per cent examination when we have the scanners, that is an impediment to trade,” Amiwero said; adding that the time spent to conclude business in Nigerian ports and border post is much higher than anywhere in the West African sub-region.

The level of corruption at the port border post is high and making them the most expensive business environment in Africa; as un-receipted charges far outweigh the official charges in the process of good clearing. Importers are still submitting hard documents instead of making use of e-devices, and going through the cumbersome process of clearing and receiving of consignments. Continue Reading…

Secondhand Cars ZimbabweVehicle imports through the Beitbridge Border Post increased by 23 percent between January and May this year compared to the same period last year, the Zimbabwe Revenue Authority has said. The increase is attributed to the price freeze of vehicles in South Africa and also the exorbitant prices of vehicles on the local market. Prices of second hand vehicles in South Africa have remained stable for the past 12 months. It costs on average US$7 000 to buy a second hand modest car from South Africa and at least US$20 000 and above to buy a similar car on the local market.

Figures from Zimra show that a total of 14 114 vehicles have been imported through Beitbridge between January 1 and May 31, 2013 compared to 10 851 vehicles during the same period last year.

Investigations by Herald Business show that on average Zimra clears a total of 1 500 cars per month at Manica bonded warehouse, and the figure has increased to between 2 000 and 3 500.

A total of between 15 and 25 car carriers offload vehicles at Manica daily. Zimra’s legal and corporate affairs director Ms Florence Jambwa said that most of the cars were coming from Japan via Durban, South Africa.

“There has been a marked increase of motor vehicle imports at Beitbridge Border Post this year as compared to the year 2012.

“The month of January had the lowest number of imports (1 194) while the month of May had the highest number (3 706), in fact there has been an increase every month.

“You will note that imports of motor vehicles through Beitbridge are increasing as such the work load increases.

“However, the Zimbabwe Revenue Authority employs several strategies to curb challenges at the border post mainly through embracing modern technological innovations such as the use of scanners and the ASYCUDA World system which is Internet-based,” said Ms Jambwa.

She said they had already addressed the challenges that were affecting the processing of vehicle imports at Beitbridge border post. Early this year there had been an outcry over the slow processing of vehicle imports at Manica where importers were spending around two days to complete the processes with Zimra. On average it should take less than one and half hours per vehicle if correct documentation was made available. She said they had no backlogs in terms of printing the customs clearance certificates for all newly imported vehicles.

Herald Business is reliably informed that plans are underway to have a cash office at the bonded warehouse and the authority has been encouraging its clients to make their payments through the bank and avoid carrying cash. Source: Zimbabwe Herald

Best SA Exporters

February 13, 2013 — Leave a comment

best_sa_logoBest SA Exporters is an online based business, created in order to promote export-ready Southern African goods and services to the international marketplace. In essence, Best SA Exporters role is to assist in growing your international trade, resulting in foreign direct investment and national job creation. Clients are advertised and promoted through a highly visible Best SA Exporters website, as well as through popular social networking presence on Facebook, Twitter and LinkedIn. Adding on to these services, Best SA Exporters now offers an international trade related company the opportunity to promote its goods / services to the Best SA Exporters database of approximately 8000 online subscribers. Trade leads received for each campaign will then be collated and supplied exclusively to you as an advertiser. Something worthwhile for exporters to look into?

cigdm_newlogoCUSTOMS Info (Ci) now offers import regulations by HTS code for 220 countries. This data will help Trade Professionals to screen items shipped across borders for importation restrictions and requirements from each country.

This data can be used for automating red flags by HS code. Once a flag is obtained, users may research the regulations under the GistNet tab in CUSTOMS Info’s subscription site or on their own. “We are excited about this new data set because it is new and bound to get more detailed,” Ron Lackey, President of CUSTOMS Info.

For a sample file of this data that includes Chapters 28 & 38 of the Harmonized Schedule, visit: http://www.customsinfo.com/download-a-free-sample-of-new-regulatory-content/. (You will find South African customs regulatory reference detail here as well)

Ci provides the world’s most comprehensive trade data repository delivered via web-based subscription, API web services or as data to populate any GTM or Landed Cost application. Ci is the largest provider of duty and tax content for international e-commerce with hundreds of e-commerce sites utilizing our data to provide accurate landed cost information.

Researchers and students of international trade patterns and economics will find a useful resource in the following link. Information is made available across databases, annual publications as well as interactive statistics and maps. Please take note of the copyright.

WTO Statistics

A much-awaited edition of the World Customs Journal has been published and is available on their website follow this link. In his editorial, Professor David Widdowson reflects on the recent WCO conference on Excise Administration and Enforcement.  “An important subject for discussion at the Excise Summit was the increasing incidence of illicit international trade, particularly in relation to alcohol and tobacco products, and we are pleased to provide a useful overview of the topic in Section 3 of this edition of the World Customs Journal”, states Professor Widdowson (World Customs Journal, vol. 6, no. 2, p. v).  It is not often that the subject of Excise attracts much or any real conference publicity, so it is all the more a treat to have such a bumper edition on the subject with papers and articles from academics and practitioners.

In South Africa, the subject is somewhat subdued given the emphasis and prominence accorded to the Customs Modernisation Programme. Of late there have been determined efforts within the SARS administration to initiate some focus on Excise. This is only right since many of the so-called excise manufacturers and supporting industries play a significant role not only towards their contribution to the South African fiscus, but likewise have linkages with the import and export logistics supply chain. For this reason alone, the WCJ September 2012 Edition comes at a fortuitous time. I would also encourage you to read the article by Elizabeth Allen (a collaborator on my blog) titled – The Illicit Trade in Tobacco Products and How to Tackle It.