Thailand’s National Single Window Development Somnuk Keretho, PhD Director, Institute for IT Innovation . Kasetsart University, Bangkok sk@ku-inova.org An integrated Trade Facilitation Strategy for Greece including Single Window 19-20 July 2012, Athens, Greece 1

Thai Case Logistics as the National Competitiveness Strategy recognized by the Government and Business Leaders in 2003. Logistics Cost/GDP1 Thailand ~19% Japan ~ 11% USA ~ 9% EU ~ 7% This is a threat, but also an opportunity for improvement. 1 Ref: The Brooker Group 2 Thailand GDP, 2004: ~6 million-million bath

Background Facts / Findings Thailand Logistics Development Thailand logistics cost to GDP (1998-2007) was in a range of 17 - 20 percents (about double the cost of many developed countries…) Logistics and trade facilitation are the important factors that contribute to the competitiveness of developing countries Thailand logistics service is mostly in the beginning stage of development There is a significant potential for Thai logistics business services to grow and create economic values for Thailand and enhance international trade efficiency between Thailand and other countries. Thailand Logistics Development Brain storming in 2003 Thailand Single Window e-Logistics Plan (2004) Logistics Development Strategy (2005-2007)

Logistics Development Master Plan (2007 - 2011) endorsed by the Thai Cabinet on Feb 2007 To reduce the trade logistics cost from 19% (2007) to 16% (2011) (comparing to GDP)

Trade Movement – 3 Kinds of Flow Buyer (Importer) Seller (Exporter) Physical Goods Payment Information/Documents Information/Documents Wholesalers Traders Post-Harvesters Cargo Insurance Farmers Exporters Banks Traders Consumers Importers Freight Forwarders Customs Other-Government-Agencies Ship Agent Transport-Operators Terminal-Operator Carriers

Thai Case Example Documents related to Exportation of Rice (from purchase order until the cargo container leaving the sea port) 36 Documents involving 15 parties, and more than 1,140 data elements to be filled in Proforma Invoice (35) Purchase Order (39) Commercial Invoice (51) Application for Letter of Credit (24) Letter of Credit (32) Packing List (25) Cargo Insurance Application Form (20) Cover Note (23) Insurance Policy (24) Booking Request Form – Border Crossing (25) Booking Confirmation – Border Crossing (30) Booking Request Form – Inland Transport (16) Booking Confirmation – Inland Transport (18) Bill of Lading (42) Empty Container Movement Request (TKT 305) (20) Request for Port Entry (TKT 308.2) (27) Equipment Interchange Report (EIR) (24) Container Loading List (28) Container List Message (32) Outward Container List (34) Master Sea Cargo Manifest(17) House Sea Cargo Manifest (37) Export Declaration (114) Good Transition Control List (27) Application for Permission to Export Rice (KP. 2) (24) Sales Report (KP 3) (21) Application for the Collection of the Permit for the Export of Rice (A. 3) (35) Permit for the Export of Rice (A. 4) (35) Application for Certificate of Standards of Product (MS. 13/1) (44) Certificate of Analysis (17) Certificate of Product Standards (MS. 24/1) (45) Certificate of Fumigation (21) Application for Phytosanitary Certificate (PQ. 9) (29) Phytosanitary Certificate (33) Application for Certificate of Origin (42) Certificate of Origin (38) Buy/Pay Docs Regulatory Docs Transport Docs * Number in parenthesis is the no. of data elements

16 days required for procedures & documents handling Conduct Business Process Analysis - Exporting Jasmine Rice from Thailand - 16 days required for procedures & documents handling 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Day Process 20 10 5 15 3 days 2 days 4 days 1 day 1 3 6 7 8 9 12 14 2 4 13 16 11 Time-Procedure Chart 1. Buy - Conclude sales contract and trade terms 2. Obtain export permit 3. Arrange transport 4. Arrange the inspection and fumigation 5. Obtain cargo insurance 6. Provide customs declaration 7. Collect empty container(s) from yard 8. Stuff container(s) 9. Transfer to port of departure 10. Clear goods through customs 11. Handle container at terminal and stow on vessel 12. Prepare documents required by importer 13. Verify the accuracy/authenticity of exported cargo 14. Pay - Claim payment of goods

Exporting Rice (from purchasing time till the vessel leaving the port) 36 required documents (only 4-6 e-documents) 15 Stakeholders involved 14 big steps (123 small steps) 16 days needed (all together) 6 days for regulatory procedures 7 days for transport-related procedures 12 days for traders, banks and insurance procedures

Current Situation (2007) About 80% of required documents - Declaration - Invoice - Packing List New Generation of EDI (ebXML MS/XML Messages/Digital Singnatures) About 80% of required documents are physical papers not electronic papers yet. Separate ICT islands Paperless Customs Declaration and Clearance Customs Dept Server Exporter Browser (Request for C/O) Web-Based Application (Certificate of Origin) Dept of Foreign Trade Browser (Request for Health Cert.) except Shrimp (Request from Dept of Fisheries) Web-Based Application (Health Certificate) Dept of Livestock Development ha Many Paper Documents Web-Based Application (Health Certificate) Dept of Fisheries Paper Handling and/or Web-Based Application (Bill of Lading) Carriers or other logistics service providers

Thailand vision: from multiple windows to Single Window To reduce time used on document procedures ~ 24 days *(World Bank 2006) Less than 10 Days National Single Window Carriers & LSP Exporter And Importer Government Agencies ~350 data items and no travel needed Single entry process Data Harmonization One day delay costs 1% reduction in export value (World Bank, 2006) Direct and indirect costs incurred in documentary process account for 1-15 % of finished goods (OECD, 2003) Impact to economy

A Conceptual Architecture of the “To-Be” National Single Window Thai Case Example Now, technical interoperability standard (e.g. based on ebXML MS) is needed, and common definitions of data elements, and semantic data structures (common data models) among different documents required by different organizations are required also. Paperless Customs Declaration and Clearance Customs Dept 36 Regulatory Agencies Exporter National Single Window Web-Services (ebXML) Application (Certificate of Origin) Dept of Foreign Trade Goal - Single Window/e-Documents One time submission for each data element but multiple usage for different purposes on different ICT platforms Web-Services (ebXML) Application (Health Certificate) Dept of Livestock Development Web-Services (ebXML) Application (Health Certificate) Dept of Fisheries Web-Services Applications (e.g. Bill of Lading, and other documents) Carriers or other logistics service providers

Thailand SW Architecture (Regulatory SW) Governance Mechanism – policy decision, service charge regulation, service level agreement etc. 2 Importer/ Exporter Carrier Ship Agent, Airlines Agent Custom Broker/ Freight Forwarder Bank and Insurance Other Logistics Service Providers Private Sector &Transport Agencies Other Business Parties VAS Value-Added Service Providers Services for Single Window Entry and Business Process Management 5 6 National Single Window (NSW) By Customs Department e-Document Exchange Hub for Cross-boarder Trade and Transport 1 3 Customs Dept Dept. of Foreign Trade Disease Control Fisheries Port Authority Of Thailand Port/Airport 36 Government and facilitating Agencies Other agencies ebMS VAS Gateway Process Re-design & Data Harmonization VAS Gateway Process Re-design & Data Harmonization VAS Gateway 7 7 ICT National Infrastructure and related IT Laws responsible by Ministry of ICT 4 12

Roles & Participants Electronic document Exchange Service Document exchange between government agencies (G2G) via Government Information Network (GIN) supported by MICT Data exchange between government and business sectors (G2B) via VAN/VAS providers Data exchange between business sectors (B2B) via VAN/VAS providers National and International Gateways Integrate / link VAN/VAS (import, export and logistics) National gateway for data exchange between Thailand and ASEAN Members National gateway for data exchange between Thailand and other countries Participants / Clients 40 government agencies (35 user agencies and 5 support agencies) 125,000 traders (importer, exporter, customs broker, freight forwarder, shipping lines, air lines, sea port, air port, logistics service providers, bank,…) Others (ASEAN Member and other countries….)

National Commitment National Logistics Committee chaired by the Prime Minister Minister of Finance, Minister of Industry, Ministry of Commerce, Ministry of Transport, NESDB (National Economic and Social Development Board), …. Executives from business sectors Thailand National Single Window is one of the National Agendas ASEAN Agreement to establish the ASEAN Single Window ASEAN – 6 (2008) ASEAN – 4 (2012) Leading Agency The Customs Department, Ministry of Finance Business/Financial Model of National Single Window Initial funding by the government (100%) supervised by the Customs No transaction fee for data exchange among government and trade

Interagency Collaborative Platform National Committees and Working Groups National Logistics Committee of Thailand National Sub-committee on Data Integration for Import, Export and Logistics Steering Committee on National Single Window Development Committee on Regulatory Framework and Quality Assurance of Thailand NSW Inter-Agency Technical Working Group for National Single Window Inter-Agency Legal Working Group Committees and Working Groups (within each agency) Business process analysis and reforms A Lot of Workshops, Group discussion and consultations to simplify and streamline business process among government and business sectors ASEAN Meetings and Working Bodies AEC Council, AEM, AFM, ASEAN Customs Director-General, …. ASEAN Single Window Steering Committee (ASW) Technical Working Group for ASW Legal & Regulatory Working Group for ASW, etc

Legal and Agreement Framework Electronic documents legally recognized under the National Electronic Transactions Act (April 2001) Enhance Departmental regulation for e-document exchange among government and business sectors Inter-Agency Legal Working Group enables relevant legal frameworks for paperless service among 35 government agencies MOU among 36 organizations were signed for electronic document adoption (including representatives from business sectors)

Evolution of Thailand National Single Window

A Single Submission for Electronic Customs Declaration Submission with Digital Signature All transactions are electronically exchanged, e.g. Customs e-payment, risk analysis, reporting, … Referring to – ‘Thailand NSW” presentation by Mr. SINMAHAT Kiatjanon, Thai Customs Department - February 2010., Nepal.

Adoption of e-Document Exchange around the country taking times!

”As-Is” Business Process Analysis for Exporting Jasmine Rice Thai Case ”As-Is” Business Process Analysis for Exporting Jasmine Rice Problems : - Duplicated Information & 3-5 physical visits to different locations - High Cost and Time for sending and receiving documents - Possible Data Inconsistency

Thai Case ”To-Be” or new/faster/better Process with Data Harmonization for possible Single Data Entry

A Regional Connectivity: ASEAN Single Window ASEAN Data Model uses information parameters from 13 documents for cross-border cargo clearance.

Cross-border Collaboration ASEAN Single Window (ASW) ASEAN Agreement for ASW signed by ASEAN Economic Ministers (9 December 2005) and ASEAN Protocol for ASW signed by ASEAN Finance Ministers(5 April 2006) ASW Pilot project Exchange of ECO for ASEAN and ASEAN Customs Declaration Document ASEAN engaged consulting firm to study the solution for the ASW pilot project Malaysia-Thailand B2B Cross Border Initiative Facilitation of Trade Route through the use of RFID Pilot project start 2010 (TNT & DHL, …) Live and Enhancement (2011) Thailand – Lao B2B Pilot Project Initiative (2010) Lao importers can reuse electronic export customs declaration receiving from exporter in Thailand Thailand – Taiwan G2G pilot project Initiative ECO (electronic certificate of origin) pilot project for trade facilitation 1st Joint Meeting in Taipei (December 2010)

Customs Clearance Impacts Ref: Sinmahat K. “NSW in Thailand”, a presentation in Nepal, Feb 2011.

National Trade Improvement

Recommendations for Greece Development of Electronic Customs Declaration Submission with Digital Signature (or other appropriate means for online identification) with other supporting functions, e.g. Risk Assessment Customs Duty e-Payment (connecting with Banks) Physical examination reduction Online statistics reporting VAT refund operational improvement, etc.. Development of paperless import/export-related permits and certificates issuing and e-document exchange for speeding up and more effective Customs control with agriculture products and other specialized goods.

Thank you. “Dear friend, I pray that you may enjoy good health and that all may go well with you, even as your soul is getting along well.” 3 John 2  [The Holy Bible]. Somnuk Keretho, PhD UNNExT Advisory Committee Director, Institute for IT Innovation ...... Kasetsart University, Bangkok sk@ku-inova.org 27