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TOOLS AND MEASURES FOR TRADE FACILITATION - Escap

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<strong>TOOLS</strong> <strong>AND</strong><br />

<strong>MEASURES</strong> <strong>FOR</strong><br />

<strong>TRADE</strong> <strong>FACILITATION</strong><br />

Seminar on Trade Facilitation in SPECA<br />

Countries<br />

12-13 13 December 2006, Dushanbe<br />

Noordin Azhari<br />

Chief, Trade Efficiency and Facilitation Section<br />

Trade and Investment Division<br />

UNESCAP


Why do SPECA Countries need trade<br />

facilitation?<br />

High Trade<br />

Transactions<br />

Costs<br />

More Expensive<br />

Exports<br />

Hindered<br />

Competitiveness<br />

<strong>TRADE</strong> EFFICIENCY & <strong>FACILITATION</strong><br />

2


Comparison of the process of<br />

trading across border<br />

Region or Economy Documents Time Cost Documents Time Cost<br />

for export for export to export for import for import to import<br />

(number) (days) (US$ per container) (number) (days) (US$ per container)<br />

Armenia 7 34 1600 6 37 1750<br />

Azerbaijan 7 69 2275 18 79 2575<br />

Kazakhstan 14 93 2780 18 87 2880<br />

Kyrgystan .. .. .. 18 127 3032<br />

Mongolia 11 66 3007 10 74 3030<br />

Tajikistan 14 72 4300 10 44 3550<br />

Uzbekistan 10 44 2550 18 139 3970<br />

East Asia & Pacific 7 24 885 9 26 1037<br />

Europe & Central Asia 7 29 1450 10 37 1589<br />

Latin America & Caribbean 7 22 1068 10 28 1226<br />

Middle East & North Africa 7 27 924 10 35 1183<br />

OECD 5 11 811 6 12 883<br />

Source: World Bank, 2006, http://www.doingbusiness.org/ExploreTopics/TradingAcrossBorders/<br />

3


UNESCAP<br />

Trade Facilitation Framework<br />

4


TFF targets five specific<br />

areas:<br />

• Trade and customs laws and regulations<br />

• Trade documentation<br />

• Customs clearance procedures<br />

• Trade and customs enforcement<br />

• The use of ICT for trade facilitation<br />

6


A Step-by-step Approach<br />

Stage Ai<br />

Collect feedback,<br />

analyze, assess and<br />

prioritize the needs<br />

Stage Aii<br />

Establish the<br />

Facilitation Institutional<br />

Structure<br />

Develop<br />

trade finance<br />

infrastructure<br />

Stage Bi<br />

Revise trade<br />

and customs<br />

laws and<br />

regulations<br />

Stage Bii<br />

Simplify,<br />

standardize<br />

and harmonize<br />

import-export<br />

and Customs<br />

procedures and<br />

documentation<br />

Stage Biii<br />

Implement<br />

effective trade<br />

and customs<br />

enforcement<br />

Stage Biv<br />

Implement<br />

effective<br />

information<br />

dissemination<br />

Stage Bv<br />

Apply<br />

information and<br />

communication<br />

technology (ICT)<br />

Stage Bvi<br />

Review and<br />

assess<br />

results<br />

7


Stage Ai<br />

• Collect feedback, analyze, assess and<br />

prioritize<br />

• Target group: Private sector<br />

• Aim:<br />

• Collecting a detailed feedback from a private<br />

sector players by a governmental agency (lead<br />

agency in trade facilitation implementation), or a<br />

National Trade Facilitation Body<br />

• Assessing the feedback and prioritize the needs<br />

• Method: questionnaires, surveys<br />

8


Tools available:<br />

• UNESCAP Trade Facilitation Framework<br />

and relevant questionnaires<br />

• World Bank Trade and Transport<br />

Facilitation: Toolkit for Audit, Analysis and<br />

Remedial Action<br />

• WCO Self-assessment Checklist for GATT<br />

Articles V, VIII and X<br />

9


Stage Aii<br />

• Establish the trade facilitation institutional<br />

structure<br />

• Participants: Public and private sector<br />

• Aim:<br />

• Set an appropriate intra-government and privatepublic<br />

collaborative mechanism to develop trade<br />

facilitation strategies and assist with implementing<br />

trade facilitation measures<br />

• Method: Dialogue among the government<br />

agencies themselves and government and<br />

private sector<br />

10


Tools available:<br />

• UNECE Recommendation 4 on National<br />

Trade Facilitation Bodies<br />

• UNESCAP Study on National Coordination<br />

Mechanisms for Trade and Transport<br />

facilitation<br />

• World Bank Trade and Transport<br />

Facilitation: Toolkit for Audit, Analysis and<br />

Remedial Action<br />

11


Stakeholders in general<br />

• Public:<br />

• Private:<br />

Ministry of Trade/ Economy<br />

Ministry of Transport<br />

Ministry of Finance/ Customs<br />

Ministry of ICT/<br />

Communications<br />

Ministry of Agriculture<br />

Veterinary & phytosanitary<br />

agencies<br />

Ministry of Health<br />

Immigration Office/ Agency<br />

Traders<br />

Freight Forwarders<br />

Customs Brokers<br />

National Trade and Transport<br />

Carriers<br />

Facilitation Committee<br />

(NTTFC)<br />

Insurance agents<br />

Banking sector<br />

12


Stage Bi<br />

• Revise trade and customs laws and<br />

regulations<br />

• Participants: Public and private sector<br />

• Aim:<br />

• Streamlined, clear and transparent regulations,<br />

which are harmonized with the relevant<br />

international and regional trade and customsrelated<br />

conventions<br />

13


Tools available:<br />

• Revised WCO Kyoto Convention<br />

• GATT Articles V, VIII and X<br />

• Article VII of the GATT 1994 and the relevant<br />

agreement on implementation of this article<br />

• WTO Agreement on Import Licensing<br />

Procedures;<br />

• WTO Agreement on Rules of Origin;<br />

• WTO Agreement on the Application of Sanitary<br />

and Phytosanitary Measures.<br />

14


Stage Bii<br />

• Simplify, standardize and harmonize<br />

import/export documentation and procedures<br />

• Participants: Public sector/ National Trade and<br />

Transport Facilitation Committee (NTTFC)<br />

• Aim:<br />

• Streamlined and simple trade documents and procedures,<br />

which are aligned to the international conventions and<br />

standards<br />

15


Total trade transaction approach to<br />

trade facilitation<br />

BUY<br />

SHIP<br />

PAY<br />

Prepare For<br />

Export<br />

Export Transport<br />

Prepare for<br />

Import<br />

Import<br />

INVOLVES<br />

Commercial<br />

Procedures<br />

Transport<br />

Procedures<br />

Regulatory<br />

Procudures<br />

Financial Procedures<br />

• Establish Contract<br />

• Order Goods<br />

• Advise On Delivery<br />

• Request Payment<br />

• Establish Transport<br />

Contract<br />

• Collect,Transport and<br />

Deliver Goods<br />

• Provide Waybills,<br />

Goods Receipts<br />

Status reports etc.<br />

• Obtain Import/Export<br />

Licences etc<br />

•ProvideCustoms<br />

Declarations<br />

• Provide Cargo<br />

Declaration<br />

• Apply Trade Security<br />

Procedures<br />

• Clear Goods for<br />

Export/Import<br />

• Provide Credit Rating<br />

• Provide Insurance<br />

• Provide Credit<br />

• Execute Payment<br />

• Issue Statements<br />

Source: UN/CEFACT<br />

16


Tools available (1):<br />

• United National Layout Key for<br />

Trade Documents<br />

UNECE Recommendation 1; ISO<br />

6422<br />

The most widely used<br />

international standard for trade<br />

documents<br />

Same data and information are in<br />

the same place<br />

Same format used regardless a<br />

size of paper (A4 and the U.S<br />

legal format)<br />

Precondition to move to<br />

electronic documents<br />

17


Source: UNeDocs<br />

18


Tools available (2):<br />

• WCO Revised Kyoto Convention<br />

• United Nation Trade Data Elements Directory (UNTDED; ISO 7372)<br />

• ISO Country Code: Code for Representation of Names of Countries<br />

(Recommendation 3, ISO 3166)<br />

• The United Nations Code for Trade and Transport Locations (UN/LOCODE,<br />

Recommendation 16)<br />

• Facilitation Measures related to International Trade Procedures<br />

(Recommendation 18)<br />

• UN/CEFACT Recommendation no. 3 - use of ISO Country Codes in<br />

documents;<br />

• UN/CEFACT Recommendation no. 5 – use of INCOTERMS;<br />

• UN/CEFACT Recommendation no. 7 – use of numerical representation of<br />

dates and time;<br />

• UN/CEFACT Recommendation no. 9 – use of alphabetic Code for<br />

Currencies;<br />

• UN/CEFACT Recommendation no. 16 – use of codes for ports and other<br />

locations;<br />

• UN/CEFACT Recommendation no. 19 – use of codes for modes of<br />

transport;<br />

• UN/CEFACT Recommendation no. 20 – use of codes for unit of measures.<br />

19


Stage Biii<br />

• Implement effective trade and customs<br />

enforcement<br />

• Participants: Customs Administration<br />

• Aim:<br />

• Develop the efficient trade statistics system<br />

• Identify and assess areas of risk<br />

• Allow pre-submission of documents<br />

• Implement a systematic pre-inspection and post-audit<br />

programme<br />

• Establish pre-payment of duties<br />

• Set a juxtaposed customs offices<br />

20


Tools available:<br />

• Revised WCO Kyoto Convention<br />

• WCO Risk Management Guide<br />

• WCO Guideline for the Immediate Release of<br />

Consignments by Customs<br />

• WCO Framework of Standards to Secure and<br />

Facilitate Global Trade<br />

• WCO Customs Data Model<br />

• UN/EDIFACT<br />

• UNECE International Convention on the<br />

harmonization of Frontier Controls<br />

21


Stage Biv<br />

• Implement effective information dissemination<br />

• Target group: Private sector (importers/exporters and other<br />

operators), policy makers, academia<br />

• Aim:<br />

• Develop effective dissemination of trade-related information,<br />

such as laws, regulations, procedures, documentary<br />

requirements, for business<br />

• Establish national inquiry points<br />

• Enhanced transparency<br />

• Methods& tools:<br />

• Use of a Single Window facility (Customs, MIT)<br />

• Establishing Enquiry Point (MIT)<br />

• On-line availability of information and documents<br />

22


Tools available:<br />

• Revised WCO Kyoto Convention (general annex,<br />

chapter 9, standard 9.2, “information to be readily<br />

available”)<br />

• ECE Harmonization Convention (provisions requiring<br />

availability of information on SPS inspection and on<br />

technical standards requirements)<br />

• GATT Article X – Issues of transparency and availability<br />

of trade-related information, including the modes and<br />

means of publications<br />

• ESCAP is developing a database on trade and transport<br />

facilitation, which is one of the outputs of this project,<br />

where we are trying to collect with your kind assistance<br />

all relevant laws, documents and information relating to<br />

T&TF<br />

23


Stage Bv<br />

• Application of information and communication<br />

technologies<br />

• Participants: Public sector implementer/ private sector driver<br />

• Aim:<br />

• Blueprint of the electronic trade documentation system<br />

(ETDS)<br />

• Legislation allowing for ETDS<br />

• Electronic on-line documents<br />

• Automated customs procedures and electronic documents<br />

submission<br />

• Phased approach<br />

24


Tools available:<br />

• UNESCAP: ICT Application Guidelines in Trade<br />

and Transport Facilitation for Landlocked<br />

Countries<br />

• UNESCAP: Trade Facilitation Framework (Bv)<br />

• UNECE: UN/CEFACT Standards<br />

• UNECE: UNeDOCs<br />

• WCO: Kyoto Convention – ICT Guidelines<br />

• UN/CEFACT: Single Window (Recommendation<br />

33)<br />

25


Meeting regulatory requirements and<br />

exchanging information with<br />

government<br />

Current Situation for Government & Traders<br />

Trader<br />

Transport<br />

Electronic<br />

Customs<br />

Agriculture<br />

Paper<br />

Health Dept<br />

26


A Single Authority that receives information, either on paper or<br />

electronically, disseminates this information to all relevant<br />

governmental authorities, and co-ordinates controls to prevent<br />

undue hindrance in the logistical chain (e.g. Sweden)<br />

Source: UN/CEFACT Rec. 33<br />

27


National Blueprint<br />

Aligned Paper<br />

Documents<br />

Trade<br />

Customs<br />

Transport<br />

UNeDocs Stage I<br />

Aligned Electronic<br />

Documents<br />

DDM<br />

Other XML<br />

UNeDocs XML<br />

EDIFACT<br />

TDED<br />

ISO 7372<br />

UNeDocs Stage II<br />

Integration<br />

Services<br />

Web Services<br />

Digital Signature<br />

Automated Validation<br />

XML to PDF<br />

National Services …<br />

National Strategies<br />

Secure Supply Chain<br />

Single electronic Window<br />

Transport Facilitation<br />

….<br />

UNeDocs Stage III<br />

Use of ICT Applications in Trade/<br />

Transport Facilitation (Readiness Level)<br />

28


Stage Bvi<br />

• Review and assessment of results<br />

• Participants: MIT, MRTT, MF/ Customs,<br />

ICT Agency, NTTFC, private sector<br />

• Aim:<br />

• Evaluate whether improvements of each step met<br />

national objectives<br />

• Improve on a regular basis<br />

29


APPLICATION OF UNESCAP TF FRAMEWORK<br />

Country Armenia Azerbaijan Kazakhstan Kyrgyzstan Mongolia Tajikistan Uzbekistan<br />

Stages<br />

Ai – Collect feedback, analyze, assess and prioritize needs<br />

Ai –1: Conduct detailed survey X X X X X<br />

Ai –2: Conduct focus group discussions X X X X X<br />

Ai –3: Document the findings X X X X X X<br />

Number of “” 3 0 0 0 2 0 0<br />

Aii – Establish the trade facilitation institutional structure<br />

Aii – 1: Designate a lead agency (LA) X <br />

Aii – 2: Establish a trade facilitation advisory committee X X X X X<br />

Number of “” 1 1 1 1 2 1 1<br />

Bi – Revise trade and customs laws and regulations<br />

Bi – 1: Obtain a clear understanding of the overall trade legislative X <br />

and regulatory framework<br />

Bi – 2: Review the import-export laws to determine relevance and X <br />

conformity with international conventions and obligations<br />

Bi – 3: Review customs act to assess conformity with international X <br />

conventions and recommendations<br />

Bi – 4: Review bilateral, regional and multilateral agreements on <br />

trade, transport and transit to determine whether existing legislation<br />

has incorporated elements of these agreements<br />

Bi – 5: Consolidate and streamline all trade related regulations X X X X <br />

Number of “” 4 5 4 3 5 2 5<br />

Bii – Simplify, standardize and harmonize import-export<br />

documentation and customs procedures<br />

Bii –1: Classify all tradable products and identify agencies involved <br />

in implementing trade controls<br />

Bii –2: Review current trade and customs procedures <br />

Bii –3: Streamline, simplify and harmonize trade document<br />

X X X X<br />

processing<br />

Bii –4: Align and simplify documents used in trade X X X X<br />

Number of “” 3 3 2 3 4 3 2<br />

Biii – Implement effective trade and customs enforcement<br />

30


APPLICATION OF UNESCAP TF FRAMEWORK (cont’d)<br />

Biii – 1: Develop an efficient trade statistics collecting system X X X <br />

Biii – 2: Establish channels of trade intelligence X X X X<br />

Biii – 3: Identify and assess areas of trade risk X X X X X<br />

Biii – 4: Implement systematic pre-inspection and post-audit<br />

X X X X X X<br />

programme<br />

Biii – 5: Allow pre-submission of documents X X X X X X<br />

Biii – 6: Establish pre-payment of duties X X X X <br />

Biii – 7: Conduct physical inspections based on risk profiling X <br />

Biii – 8: Set up juxtaposed customs offices <br />

Number of “” 4 6 5 2 5 1 4<br />

Biv – Implement effective information dissemination<br />

Biv – 1: Conduct information and training needs assessment X X X X X X X<br />

Biv – 2: Develop mechanisms to inform the business community X <br />

Biv – 3: Collaborate with other agencies and industry associations X X<br />

Biv – 4: Establish help desks and contact points X X X X <br />

Number of “” 2 3 2 2 3 0 2<br />

Bv – Apply information communication technology<br />

Bv –1: Develop blueprint for Electronic Trade Documentation<br />

X X X X X<br />

System (ETDS)<br />

Bv –2: Provide legislative powers for ETDS X X X X X X X<br />

Bv –3: Developing electronic online documents (eDOCs) for ETDS X X X X X X X<br />

Bv –4: Automating internal processes of agencies involved in<br />

X X X X X X X<br />

ETDS<br />

Bv –5: Appointment of ETDS vendor and contractor X X X X X X X<br />

Bv –6: Develop the ETDS system and software X X X X X X X<br />

Bv –7: Establish technical and training support X X X X X X X<br />

Bv –8: Develop e-payment system for customs duties X X X X X X X<br />

Total number of “” 17 19 15 11 21 7 14<br />

31


THANK YOU<br />

<strong>FOR</strong> ATTENTION<br />

azhari@un.org

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