Trade Facilitation Role of Modern Technology

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Trade FacilitationRole of Modern Technology

• Hamid Alavi
• Middle East and North Africa Region, World Bank
• Prepared for Trade Facilitation Capacity
  Building Workshop
• El-Sokhna, Egypt
• April 17-20, 2004

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What is Trade Facilitation?

• Facilitating market access
• Quality standards and lowering technical barriers
• Market access schemes
• Access to export finance and insurance
• Lowering transaction costs through
• Improved transport and trade logistics
• Enhanced information flows

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Lowering Transactions Costsby improving trade
and transport logistics

• Efficient border crossing
• Efficient transport and distribution services
• Efficient flow of information
• Institutional coordination

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How important are transaction costs

• Trade logistics costs are as important as
  tariffs, even more binding on trade
• Singapore 1 of GDP
• Tunisia 3-company case

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Pay Taxes Clear Customs Release Goods
IMPORT
MANUFACTURING/ VALUE ADD
EXPORT
/Dues

Air, Sea, Land International Transport
DOMESTIC SUPPLY CHAIN
Storage
Customs
Port
Raw Materials Packaging Transport Storage

• Port Processes
• Internal Transport
• Storage
• Container Handling
• Loading

Ships Documents
Informal Processes
IMPORTER

• Manifest
• Bills of Lading
• Sea/AW Bill
• Container Plans

• Quotations
• P.O.s
• Delivery Notes
• Con. Notes
• Invoices
• Statements

• Invoice
• Packing List
• Declaration
• Delivery Note

• Payments
• Remittance
• Advice

Book/Confirm Transport
Shipping Documents
Pay Taxes Clear Customs Release to Port
/Dues
Foreign Chambers Commerce

• Certificates
• Of Origin

MANUFACTURER
Port
Port
Customs
Customs

• P.O.
• Contract Terms
• Delivery Instructions
• L.O.C.

Informal Processes

• Invoice
• Packing List
• Declaration
• Delivery Note

Receive Goods
Overseas Embassies

• Legal
• Invoices

EXPORTER
FOREIGN BUYER
Post/ Courier

• Certificates
• Of Origin
• Form A
• EUR.1

Chamber of Commerce
Finance Ministry
Pay
Bank
Bank

• Licenses
• Certificates
• Government
• Approvals

• Licenses
• Certificates
• Government
• Approvals

Government Departments
L.O.C. Packing List Invoice
LOC Approval
LOC Courier
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Players in the Trade Value Chain

• Importer/Exporter
• Trade Professionals
• Customs Broker
• Freight Forwarder
• Shipping Agent
• Container Terminal
• Ports and Harbours
• Storage
• Transport
• Shippers

• Customs
• Revenue
• Technical Controls
• PIAs
• Cert. of Origin
• PSI
• Legal Invoices
• Banks
• Insurers
• etc.

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Lowering Transactions CostsFlow of Documents
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Inhibitors to Trade Facilitation

• Traditional Practises
• Lack of Transparency
• Technical Controls
• Regulations
• Paper Documents
• Payment Methods
• ICT and E-Commerce Infrastructure and Experience

• Physical Space and Capital
• Costs of Admin/logistics 14
• Customs-Centric Systems
• Customs only 15 of Trade Data
• Post 911
• Cultural Issues

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Principles of Electronic Trade Facilitation

• Pre and Post Event Audits
• Container Scanning
• Straight-Through Processing
• Risk Management
• Create Facilitation Agency
• Provide a Gateway to Customs Systems
• Automate Communities

• Electronics Replaces Paper
• Reengineer Processes Codes and Standards
• Upgrade Customs ICT Systems and Processes
• Separate Payment from Processing
• Transparency
• Electronic Payment

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Single Window

• A facility providing standardized information and
  documents with a single body to fulfill
  requirements for import, export and transit
  regulations and clearance.
• In practical terms, the SW aims to expedite and
  simplify information flows between trading
  community and the government

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Models of Single Window

• Single Authority
• Sweden
• Single automated system for the collection and
  dissemination of information
• Integrated system data is processed through the
  system (USA)
• Interfaced system data is sent to the agency for
  processing (Tunisia)
• Combination of the above
• Automayed information transactions system
• Singapore, Mauritius

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Before TTN
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After TTN
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Success Factors

• Vision, Clear Plan and Leadership
• Commitment of Key Stakeholders
• Facilitation Agency
• Priorities
• The Right CEO
• Metrics
• Customs-Centric vs. Trade Facilitation

• Outsource Technology
• Use International Standards
• Limited Objectives
• Small Sub Projects
• Reengineer
• Address Problems Fearlessly
• Limited Life of Agency
• Exit Strategies

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Questions ?