E-Invoicing & Legal Aspects

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SIS Simplified Interline Settlement

• E-Invoicing Legal Aspects
• RA42 Presentation
• Michael Uebber, LH

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Overview of this Presentation

• Introduction
• Introduction to E-Invoicing
• E-Invoicing with Integrated Settlement
• Legal Aspects of E-Invoicing
• Legal Obligations of E-Invoicing

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Introduction toE-Invoicing
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The typical paper process is fragmented and
discontinuous
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E-Invoicing in the aviation industry

• Carriers are already using an e-invoicing
  platform
• Over 270 participating airlines
• Over 5,500 participating suppliers (fuel, ground
  handling, etc)
• Plus various bilateral relationships
• ? But carriers dont currently use e-invoicing
  for settlements between themselves just to pay
  suppliers ? But similar relationship (supplier
  customer)

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E-Invoicing with Integrated Settlement
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SIS follows a 2 pillar strategy to address the
challenges of e-invoicing implementations

• Address the content of e-invoicing (What
  information is part of the invoices)
• Development and maintenance of Invoice Standards
  together with industry experts ? E-Invoicing WG
  modifies the IATA Aviation Invoice Standard
• Address the communication part of e-invoicing
  (How are invoices exchanged and processed)
• A web service to support and promote the exchange
  of e-invoices ? SIS selects supplier with
  e-invoicing tool

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E-Invoicing with IS

• Create invoice file (where applicable)
• Optionally create and verify digital signature
• Optionally store e-invoice in a legal archive
• Settle claims via ICH / ACH
• Make invoice (incl. optional digital signature
  and verification) available for download

Integrated Settlement
IS-WEB
IS-WEB
Billed Airline
Billing Airline
Digital Signature Company
IS-XML
IS-XML
Enabling Processes
Enabling Processes
Billing Invoicing Processes
IS-IDEC
IS-IDEC
Prorate Engine
Other
Billing File / Data (similar to today)
Billing File / Data (similar to today)
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Legal Aspects ofE-Invoicing
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What makes an e-invoice a legal document?

• Legal document with all required information
  (based on jurisdiction), e.g.
• Specific fields (e.g. Billing Company Address or
  VAT Registration Number)
• Digital signature (if required)
• Stamp (if required)
• Depending on legal requirements, the same
  submission file could be a legal invoice or just
  simple billing data

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Required Data IS

• Some jurisdictions require 14 elements on a legal
  invoice (e.g. VAT Registration , VAT Amount,
  Billing Carriers Address, Billed Carriers
  Address, etc)
• Some jurisdictions require the proper naming
  conventions (e.g. IVA instead of VAT)
• Some jurisdictions require digital signature,
  which is string of text that is computed and sent
  with the signed document in order to prove
• Identification of invoicing party (Authenticity
  of origin)
• File content is unchanged (Integrity of
  content)
• With Integrated Settlement, the data can be
  provided in two ways
• Billing carrier leaves blank, IS supplies data
  from airline profile
• Billing carrier submits (IS will check against
  airline profile and, if they dont match, will
  send a notification)

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Different Jurisdictional Requirements

• Requirements discussed are not consistent across
  countries
• Legal requirements depend on the most restrictive
  country
• European Union Most Restrictive But new
  Activities
• United States Less Restrictive
• Other Countries - ???
• IS will be configured by each airline
• The transaction depends onthe configuration of
  the mostrestrictive airline

Digital Signature Required?
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Legal Obligations ofE-Invoicing
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Legal Obligations for E-Invoicing

• Billing Party
• Create and attach digital signature where
  necessary
• Prove conformity with e-invoicing laws
• Apply VAT where applicable
• Archive and prevent modification (e.g. on a
  CD-ROM)
• Billed Party
• Verify digital signature before processing the
  invoice
• Archive and prevent modification (e.g. on a
  CD-ROM)
• Logging of the digital signature and key, receipt
  of billing, and the type of archive and any
  conversion for 10 years

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Role of Integrated Settlement

• IS legally mandated by billing carriers to
  create or transport the invoice
• Where necessary, submitted billing data is
  transformed to an invoice by creating the
  digital signature and/or adding the reference
  data
• IS legally mandated by billed carriers to verify
  the signature, archive the invoice, and log the
  receipt
• IS also archives keys and signatures
• IATA will use a trusted company to help to
  comply with local laws and to create and verify
  the digital signatures

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Carriers Obligations with IS

• Investigate and configure the IS airline profile
  and submitted files with your countrys
  requirements for e-invoices
• Digital Signature option
• E-archiving
• Reference data
• Etc
• Ensure that your carrier complies with your local
  regulations

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Thank you.

• Email
• sis_at_iata.org
• SIS Website
• ?www.iata.org/whatwedo/finance/clearing/sis/index.
  htm