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Paperless Trading Subgroup / Electronic Commerce Steering Group

ECO Pathfinder ProjectECO Pathfinder Project

Presented by: PTS/ECSG

January 31, 2013

For SCCP


Contents

1

• Case Study

• Value Proposition

• Project Expansion

• Experiences Sharing

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APEC Pathfinder Project

• ECO project is a showcase of Public Private Partnership,

project participants include MKE (public sector), KITA and

KTNET (private sector) of Korea and BOFT, MOF (public

sector), and Trade-Van (private sector) of Chinese Taipei.

• ECO exchange model between Korea and Chinese Taipei

has been adopted by APEC member economies as a best

practice for cross border paperless trading.


Objectives of the Project

1. To facilitate cross border electronic transaction

2. To streamline the customs clearance process

3. To help traders with ease of use e-trade application for cross border trade

4. To increase more business opportunity and improve business relationship between Korea and Chinese Taipei

5. To increase competitive edges of Korean and Chinese Taipei traders

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Repository

KTNET

Repository

KCCI

1CO APPORG

2ECO CERTIF

Exporter1CO APP

2ECO (for view)

Customs

Importer

3Send Inv, P/L, Paper CO to Importer

Korea Chinese TaipeiCustoms Broker

4 Pass the paper CO to Customs Broker5 Import

Declaration

6Supplement Paper CO

6Supplement Paper CO

National Treasury Agency

Verify authenticity of

paper CO

Trade-Van

5Import Declaration

Paper CO Scenario [Korea ► Chinese Taipei]


Exporter

Repository

KTNET

Repository

Trade-Van1CO APP

2ECO (for view)

3Inv, P/L

(specify ECO Number)

3Inv, P/L,Attach ECO from repository

3Inv, P/L, ECO Importer

1CO APPORG

2ECO CERTIF

KCCI Customs

6Import Declaration ECO confirmed by importer

6Import Declaration

Customs Broker

4 Sign to confirm ECOAssign Customs Broker

5 Generate Import Declaration Data

ECO Scenario [Korea ► Chinese Taipei]ECO Enquiry on KCCI Website

With ID and Password

Korea Chinese TaipeiNew developments: cross border eSPS exchange

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User Recruitment• 16 exporters from Korea, 31 importers from

Chinese Taipei have joined the project.Korea Exporters

Export fruitsMeansunGyeong BukSamjin GlobalnetTaibongNH TradingDong SeoKyeongnongSAMWANGBu Young FarmKyungBokBurimHana pearsGreen Company ChangrakHEBEISHENXIANGHUAHE KOREA

Export oysterSea Well

Chinese Taipei Importers

•Diing Nong Enterprise •Jau Neng Agriculture Marine •Chang Lung Agriculture Trading •Chian Lun International •Greens Essence Trading Co., Ltd.•KingGo Fruits •Jih Hao Trading •Fuh Uei Trading•Pyh Perng Trading •Maru Marco Enterprise •Amanda&Vincent Resources •Rich Partner International •Dar Diing International Inc•SHANG CHUN LIN TRADING•SHIN CHAO INTERNATIONAL •FAZTech•Long Firm Trading•FU KUO HUNG ENTERPRISE•ZHWU J COMPANY •SHINE FOOD CORPORATION•Prime stone•FRUIT SEE FOOD•ZHWNJ


Contents

1

• Case Study




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Guarantee the authenticity of the cross border documents, reduce percentage of fake COReduce effort in paper CO verificationSpeed up customs clearance processBetter service to international traders

Benefits to Government


ExporterSave time and costs (courier express US$23) in applying and sending over paper CONo need to get a stamp/seal on the CO from Taipei Trade Representative Office in Korea save tremendous time (in average 3 days) and costs (US$17 per stamp, transportation cost US$20-40)Transmit cross border documents in a secure online environment Better service to their buyers

ImporterSpeed up customs clearance processExpedite cargo pick up saving warehouse costGuarantee of authentic CO

Benefits to Exporters/Importers

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Findings and Recommendation from PSU

Reducing trade transaction costs in APEC through electronic commerce:

a case study of Electronic Certificate of Origin

September, 2011 @San Francisco

Copyright © 2010 APEC Secretariat.Copyright © 2011 APEC Secretariat.

Objectives of the Study

• The aim of the study is to assess the contribution of the actions and measures of APEC’s Electronic Commerce Steering Group (ECSG) towards reducing trade transaction costs in the region by using a case study of an Electronic Certificate of Origin (e-CO) project. • Specifically, the study provides an assessment of the e-CO project in terms of reducing trade transaction costs, focusing on the Electronic Certificate of Origin (e-CO) Pathfinder Project between Chinese Taipei and Korea, the implementation of which began in June 2010, •and the extrapolation of these results assuming e-CO adoption in other APEC economies.

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Source of Information

• Based on the information obtained from a field survey (4 importer/importing customs brokers in Chinese Taipei, and 5 exporter/exporting customs brokers in Korea).


Survey Findings

Based on the information obtained from the survey the Global e-CO service has provided the following improvements in terms of reducing Trade Transaction Costs:For the Korean Exporter

•It saves time and cost in not having to get the CO authenticated at the Chinese Taipei Mission in Korea; and •avoids the cost and delay of sending the paper CO by mail or express to the importer or the importer’s customs broker. •The estimates show a total saving of US$ 217 per shipment (container) and 2 days time saving.

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Survey findings

For the Importer/ Importing Customs Broker•It saves time and cost in not having to send the CO to the Customs Broker and in person to Customs.•The estimates show a total saving of US$ 205 per shipment (container) and 3 days time saving.

Business Loss Avoidance•In addition, taking into consideration the “business loss” avoidance per shipment with the new Global e-CO process, the saving is estimated to reach US$ 274 for the Exporter and US$ 397 for the importer.


# Projection Description

Assumptions Projected APEC Trade Transaction Costs

Reduction %1 APEC wide e-CO

adoption.For most economies assume 25% of shipmentsrequire CO. Exceptions are Indonesia 60%,Thailand 20%, and Chinese Taipei less than 10%.

6.79%

2 Only Korea and Chinese Taipei adopt e-CO.

For Korea assume 25% of shipments require CO,and for Chinese Taipei less than 10%. 0.18%

3 More “e-Advanced” Economies adopt e-CO.

Assume Australia; Brunei Darussalam; Canada;Hong Kong, China; Indonesia; China; Malaysia;New Zealand; Philippines; Singapore; Thailand;US at the same ratios specified in (1) above.

2.80%

4 China + e-Advanced economies.

China + economies in (3) at the ratios specified in(1) above. 5.93%

5 Sensitivity 1 - LowAPEC wide e-CO adoption.

Assume e-CO is required for 5% of shipmentsinstead of the ratios specified in (1) above. 1.30%

6 Sensitivity 2 – High APEC wide e-CO adoption.

Assume e-CO is required for 40% of shipmentsinstead of the ratios specified in (1) above. 10.40%

Extrapolation based on different levels of e-CO adoption

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Contents

1

• Case Study





• Chinese Taipei – Korea:• Discussion to expand the project scope to include eSPS has been carried out,

targeting to have the 6th PPP meeting between Korea and Chinese Taipei in 2013

• Chinese Taipei - Philippines:• A private MOU to facilitate B2B trade and customs infor. exhcange was signed

under the 16th JEC between Phil and Chinese Taipei• Testing has been completed• The first bilateral PPP (Public and Private Partnership) meeting between

Chinese Taipei and Philippines was held in Taipei on April 17, 2012

• Chinese Taipei – Vietnam: • Vietnam expressed the will to join the project. An official meeting between

Vietnam and Chinese Taipei officials was held on December 25, 2012 at Hanoi. Vietnam is in the process of preparing a MOU with Chinese Taipei.

• Chinese Taipei – Thailand: • Thailand expressed the will to join the project and confirmed that Thai Customs

is positive about the project. eCO message spec is being reviewed by Thailand.

Project Updates

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Other Member Economies’ Participation

• Singapore contributed in this project by creating the UBL ECO Standard

• Korea co-leads the project

• Interconnectivity test between Chinese Taipei and PRC will be carried

out

• Malaysia expressed the interest to join but currently non-preferential CO

of Malaysia is still paper based.

• Peru also expressed the interest to join the project. Peru’s Preferential

CO is issued by Ministry of Foreign Trade, while Non-preferential CO is

issued by various Chamber of Commerce; will consider the exchange

model with Chinese Taipei.


Contents

1

• Case Study

• System Demonstration



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Expansion to Other Member Economies

• How do you start? – Readiness of domestic ECO application system– Readiness of digital signature law and PKI technology

for secure data transmission– Secure exchange network and PKI mutual recognition

framework to assure the authenticity of the electronic documents

– Domestic government’s acceptance of digitally signed electronic documents

– Online ECO repository for inquiry and data validation if necessary


We can share…

System interconnectivity specification and experiences using ebMS v2.0Cross border mutual recognition of digital

signaturesECO message standardECO exchange modelECO web application

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Future Development

• FTA among APEC member economies

• ASEAN CEPT Form D

• Self Certification

Consideration to have a APEC Framework Agreement among APEC member economies to implement cross border eCO exchange project

Way Forward

Cross BorderPaperless Trading

eSPS

B2B(INV, PL,

PO)

ECO

In cross border paperless trading, there’re commercial documents (B2B) and regulatory-required documents (B2G); ECO is crucial since it involves both the public and the private sectors.

Upon success of the ECO exchange, the pathfinder could be expanded to include other B2B documents as well as B2G documents, e.g. eSPS, eInvoice following the ECO exchange model.

Urge member economies to support and participate in this pathfinder project, in form of information sharing, system testing, policy discussion etc.

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Thank You

25

Contact: [email protected]

ASEAN Self Certification • ASEAN Agreement on Self Certification for Trade Facilitation

– Pilot 1: Brunei, Malaysia and Singapore– Pilot 2: Indonesia, Laos and Philippines

• ASEAN Self Certification: Operating Customs Procedures (OCP)

– Issuing Authority accredits exporter, endorse exporter signature to Customs at Importing country

– Exporter ‘certifies/signs’ on the Commercial Invoice indicating compliance of export products to ATIGA, and sends invoice as Invoice Declaration to importer

– Importer submits Invoice Declaration to Customs, as support document to Import Declaration

– Customs process Import Declaration, verifies Invoice Declaration (validate exporter signature)

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Pilot Self CertificationStep 1. Accreditation

Exporter Importer

Customs(PH, SG)

Customs(Import)

Exporter Accreditation

CO Issuing Authority

Accredited ExporterName and Specimen Signature

Pilot Self CertificationStep 2. Invoice Declaration

Exporter Importer

Customs(Export)

Customs(Import)

Purchase Order

Invoice

ExportDeclaration,

Invoice,Packing List

ImportDeclarationInvoicePacking List,AWB/BL

Invoice Declaration

InvoiceDeclaration

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Pilot Self CertificationStep 3. Verification

Exporter Importer

Customs(PH, SG)

Customs(Import)

CO Issuing Authority

Invoice Declaration

InvoiceDeclaration

Retroactive Check

PAA e-Self CertificationScope of Work: 1. Establish a database of exporters (AEO)authorized to Self-Certify

2. Enable authorized exporters to electronically Self-Certify on their commercial invoice (i.e., digital invoice signed using PKI), in lieu of the ASEAN CO Form D or the manual Invoice Declaration

3. Provide Customs and Trade Authorities access to digitallly signed and encrypted Invoice Declaration in secure and reliable electronic Self Certification system

4. Generate Periodic Reports on the Issuance and Utilization of Self-Certification, per exporter, per importer, per country of origin, etc.

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Issues/Challenges Addressed:1. Reduce costs and delays resulting from manual application,

processing, approval and amendment of ATIGA CO: Form D

2. Enhance integrity of Invoice Declaration: Invoice and Signature

3. Eliminate manual processing, ie validation of Invoice Declaration and signature verification

4. Monitoring of exporters authorized to Self-Certify

PAA e-Self Certification

1. CO Issuing Authority (Customs, Department of Foreign Trade, etc.) accredits and authorize exporters to do Self-Certification. Further, pre-qualified export products may be registered as compliant to the ATIGA ROO

2. Exporter prepares and submits Invoice Declaration (ID) electronically to buyer/consignee (using PKI and data encryption technology), after digitally signing and encrypting the ID

3. eSelf Certification to adopt ASEAN Invoice data specification and PAA Message Exchange Protocol (ebMS)

4. Importer receives and submits eInvoice Declaration to its Customs, to avail of applicable ASEAN FTA preferential tariff rate

PAA e-Self Certification

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PAA eSelf-Certification Workflow

Exporter Importer

Customs(Export)

Customs(Import)

ExportDeclaration

E-InvoiceDeclaration

ImportDeclaration

Service Provider/

PAA Member

Service Provider/

PAA Member


IssuingAuthority



NSW NSW

ASW

Purchase Order

PO Confirmation, ASN/Delivery Notice, Invoice

ele ificate of origin pathfinder proje...

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