: The Korea’s Strategy for Trade Facilitation uTradeHub : The Korea’s Strategy for Trade Facilitation Ah Rom Lee romi2327@ktnet.com

e-Trade Implementation About KTNET e-Trade Implementation Standards uTradeHub Services My presentation is divided into 4 parts, 2

About KTNET Let me introduce KTNET briefly. 3

12 million transactions per month KTNET Profile 1991 500+ documents Invested by KITA Paperless Trading services 12 million transactions per month 100% customs automation 47,052companies Customers 4,900 Shipping/ Airline / Logistics companies 100 financial Institutions / banks/ insurance companies KTNET is evaluated as the world’s first-class Paperless Trading service provider. “Korea was ranked as one of the top three economies with Paperless Trading environment”, Assessment Report On Paperless Trading of APEC Economies 2005. KTNET was established in December 1991, by the law, Trade Business Automation Act. Now we provides Five Hundred (500) kinds of electronic documents and automated customs process 100%. We handles more than 12 million transactions each month. APEC says Korea's Paperless Trading infrastructure, made and operated by KTNET, is recognized as one of the most exemplary models with its state-of-the-art information technology. * KITA: Korea International Trade Association 4

KTNET’s Paperless Trading network Other European Countries Germany France EU ASEAL U.K. Manifest Data report agent Trade Firm Forwarder Shipping Line Bank Japan China KTNET Singapore Chinese Taipei HK Malaysia Thailand Macau PAA Korea Customs Service Global Network Service Provider Customs Broker This slide shows you the Service Network of KTNET. As you can see from this picture, Korea's trading companies, banks, shipping companies, and insurance companies are utilizing KTNET's system to exchange electronic documents and to process trade related businesses with government agencies. The network is not just limited in domestic region, but has an especial alliances such as Pan Asian eCommerce Alliance and Asia Europe Alliance for Paperless Trading to enhance international networks. TRAXON Bonded Transportation ARINC Airline CyberLogitec Inspection Company AT&T 5

e-Trade Implementation - What we have done

Korea’s e-Trade Development Single Window Development MOVE to INTERNET Starting Web-based Service Certificate of Origin Letter of Guarantee Delivery Order Establishment of electronic trade platform e-Trade Document Repository Integrated and consolidated one-stop trade services SERVICE EXPANSION Import Clearance Manifest Submission Tariff Refund INITIAL SERVICE ESTABLISHMENT L/C, E/L, I/L Insurance Export Clearance Comprehensive Trade Automation Plan (1989) & Act (1991) KTNet founded (1992) Phases 1st 2nd 3rd (1990~1999) (1999~2002) (2003~)

Concept of Single Window Korean Case User Trade Chain License/ Certificate Authority Customs Service Electronic Single Window Bank Global Network Logistics Company Traders

uTradeHub Project Goal To cope with Korea’s growing trade volume by upgrading the Electronic trading system into a single window system Project Period 2004 ~ 2007 Project Cost About 30 million (USD) Ministry of Knowledge Economy (MKE) Korea International Trade Association (KITA) Korea Trade Network (KTNET) Leading Agencies Year1 Building Core Infrastructure (2005) Year 2 Introducing eTrade portal (2006) Year 3 Realizing uTrade by eBL & eNego (2007)

Legal Infrastructure Enacted Trade Automation Act (1991) Digital Signature Act Trade Automation Act (1991) e-Trade Facilitation Act (2005) Commercial Law (2007) Foreign Trade Act Electronic Transactions Act Enacted Trade Automation Act (1991) Revised the Act into ‘e-Trade Facilitation Act’ (2005) Established legal basis for circulation of e-Trade documents Defined role of service providers specializing in e-Trade Revised Commercial Law (2007) Introduced electronic bill of lading and specified the operating rules including title registry

Korea’s e-Trade before uTradeHub

Korea’s e-Trade with uTradeHub

Standards

Standardization Objective Korea Domestic & Int’l Standards Int’l -To guarantee openness and interoperability of uTradeHub with international standards so that electronic trade documents may be exchanged among related entities domestically and internationally - For uTradeHub to illustrate best practices of trade facilitation through national single window platform Domestic & Int’l Standards Korea - Guidelines for development of XML Electronic messages(v3.0), Korea Institute for Electronic Commerce (KIEC) - KIEC XML CC Library, KIEC Int’l -Core Component Technical Specification, UN/CEFACT TMG, 2003 - XML Naming & Design Rules, UN/CEFACT ATG, 2004 - UN/CEFACT Modeling Methodology, UN/CEFACT TMG, 2002

Standardization Process of uTradeHub Business Process Analysis Selection of docs for standardization 1 Analysis of Docs CC abstraction and analysis Standardization 2 Standards registration at Korea EDIFACT Committee (KEC) 3 Process Analysis (‘05.09) Document Standardization (‘06.01 ~ ‘06.12) Standards Registration (‘07.04~11)

Standards Evaluation at KEC TAG Technical Advisory Group’s Evaluation Observing standards guidelines? Technologically acceptable/desirable? SG application No. of Docs Trade: 25 Financing and payment: 57 Logistics: 6 Customs : 6 Insurance: 8 Standards Group Evaluation - Accommodating industry specific business requirements? - Reflecting standardized business process?

uTradeHub Services @ www.uTradeHub.or.kr

Business Process in uTradeHub Insurance Export insurance Credit Evaluation Caro insurance Requirements Certification Import requirement certification (customs director) Import requirement certification (recommendation) Certificate of Origin Customs Customs clearance Shipping and transportation Shipping request e-B/L Cargo delivery e-D/O (Master/House) Bonded delivery request Delivery allocation request Financing and Settlement Letter of Credit e-Negotiation

Featured Service : MFCS FFM,FWB,FSB (Cargo-IMP) Airline (Overseas) ARINC/ SITA Airline Integrated M/F (KEDIFACT) M-M/F Carrier Internet (TCP/IP MFCS KCS Cargo Management System VAN H-M/F Forwarder Functions Collects manifest information from air lines/ocean carriers/forwarders Consolidate data and submit to the Customs for comprehensive management of all cargoes entering/exiting Korea. Benefits Reduces cost of managing/distributing documents related to arrival and departure of ships, loading/unloading of cargo Increases effectiveness/correctness of cargo related information 19

Shipping Companies/ Forwarders E-DO and e-LG Mgt system Featured Service : e-DO ② Issuance of e-LG ④ access and authentication of e-L/G Shipping Companies/ Forwarders ① Bank ① Application for e-LG E-DO and e-LG Mgt system ② ‘ ⑥ Notification of e-DO ③ Submission of e-LG ⑤ Issuance of e-DO Warehouses Traders Functions provides convenient and timely ways for traders to pick-up import cargo without full set of shipping documents required for the pick-up of the cargo Benefits Saves cost by electronic procedure of application/issuance/notification of LG and DO Convenient authentication of originality of LG and DO by way of electronic password methods, thus streamlining offline procedures Increases effectiveness/correctness of cargo related information 20

Featured Service : e-LC Service L/C work process before e-L/C Advising bank EDI Negotiating Exporter Printed on Paper Paper Notification Negotiation L/C work process after e-L/C internet internet Negotiating bank Advising bank Notification Negotiation Exporter e-L/C information saved in Trade Document Repository (TDR) and shared by banks All processes (notice, transfer & negotiation) are electronically handled and recorded As the negotiation result is shared by all banks, no risk of fraudulence or loss of L/Cs 21

Featured Service : e-B/L Service e-B/L Management System Shipping Request e-B/L Title Registry E-B/L notification/inquiry Traders Portal e-TDR e-B/L issuance/ inquiry UI EAI e-B/L information inquiry Negotiation Shipping Request Shipping Request e-B/L e-B/L e-L/C balance management system Banks Shipping Lines Forwarders Create and transfer BL electronically Remove paper based operation Manage related endorsement records