Cross-Border Declarations: Experience and Challenges ECONOMIC COMMISSION FOR EUROPE (UNECE) United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Symposium on Single Window Standards and Interoperability Geneva, Switzerland, 3 – 5 May 2006 Cross-Border Declarations: Experience and Challenges 4 May 2006 Eva C.P. Chan Dagang Net Group of Companies Malaysia Dagang Net Technologies Sdn Bhd Level 20, HP Towers Jalan Gelenggang, Damansara Heights 50490 Kuala Lumpur, MALAYSIA http://www.dagangnet.com

Outline Brief Definition of Electronic Cross-Border Declarations The Two Aspects of Cross-Border Declarations Challenges Experienced The way forward

Brief Definition of Cross-Border Declarations It is the re-use of an export declaration information from one Customs Authority as an import declaration for another Customs Authority

Outline Brief Definition of Electronic Cross-Border Declarations The Two Aspects of Cross-Border Declarations Challenges Experienced The way forward

The Two Aspects of Cross-Border Declarations and its Benefits The Customs Perspective where two Customs Authorities exchange declaration information Benefits To maintain border integrity Pre-emptive analysis / lead up to single co-operative inspection method Speed up clearance process Cross-Border Traceability The User Perspective where Exporters and Importers, or their Agents exchange declaration information Labour-saving Accuracy / error reduction Efficiency / speed

Scenario: Export Singapore – Import Malaysia Exporter / FA Malaysia Importer / FA Email Notification 4. Pre- Declaration Message 1. Export Declaration 5. Declaration Data Trade Palette eDeclare / Cargo Declare TradeNet Gateway Dagang Net Gateway 6. Import Declaration Notes: 1. Singapore exporter / FA creates export declaration using TradePalette. 2. Submit export declaration to Singapore Customs. 3. Singapore Customs send Response. 4. CL generates Pre-Declaration to DN. 5. DN populates declaration data into eDeclare / Cargo Declare database. 6. Malaysia importer / FA completes the import declaration for submission to Malaysia Customs. 2. Export Declaration 3. Customs Response 6. Import Declaration Customs System Customs Singapore Customs System Customs Malaysia

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings

Free Trade Port (SG) Vs Conventional Customs port (MY) Minimal duty and taxes Minimal data requirement Trading hub Transshipment cargoes Differences Speedier clearance process at Customs regime with Free Trade Port environment HK Export / Import Customs Declaration to be submitted within 14 days after the goods released

Proximity Business practice Example Data availability Time factor Malaysia / Singapore Hong Kong / Macau

Exchange Of Import Declaration Email Notification Importing SP’s Gateway Export SP’s Gateway 4.Pre- Declaration Message Declaration System Declaration System 1.Import Declaration 5.Declaration Data 6.Export Declaration Exporting FA Importing FA 2.Import Declaration 6.Export Declaration 3.Customs Response Customs System Customs System Notes: Reverse flow of the previous scenario. This Scenario is to cater for neighboring countries such as HK-Macau, SG-MY& etc Free Port that requires declarations to be submitted after cargo clearance such as HK Customs of Importing Country Customs of Exporting Country

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings

Differences in Customs data attribute Data field length Goods description e.g. MY – 70 JP – 40 SG – 175 HK – 70 for English, 23 for Chinese Number of line items MY – 999 SG – 50 KR - 999 Decimal places

Differences in Customs data structure number of BL per declaration 1 BL per declaration (BL # at header level) Multiple BL per declaration (BL # at item level) Declaration requirement for HBL / HAWB Number of invoices per declaration Decimal places for numeric data

Other Customs data requirement Goods description Detailed goods description (as per invoice) Summarized goods description HS Tariff code AHTN (ASEAN Harmonized Tariff Nomenclatures for ASEAN Countries – implemented 1st Jan 2004) HS Codes for Non-ASEAN countries Customized codes / ID Vessel ID Exporter code / Agent code Cont…

Other Customs data requirement Export Declaration vs Import Declaration Export Declaration – Booking Reference number Import Declaration – Bill of Lading # / Air Waybill # Requirement for information parameters (mandatory / optional)

The Malaysia-Singapore Example: Differences in Customs Data Requirements MALAYSIAN CUSTOMS DECLARATION SINGAPORE CUSTOMS DECLARATION 401110000 841480520 871492110 New pneumatic tyres, of Rubber. Of a kind used on motor cars (including station wagons and racing cars) Compressors other than those of subheadings Nos. 8414.30 and8414.40: compressors for automotive air-conditioners Parts and accessories of vehicles of heading Nos. 87.11 to 87.13. - Other: - - Wheel rims and spokes: For subheading No. 8712.00 200: wheel rims 870899150 Parts and accessories of the motor vehicles of headings Nos. 87.01 to 87.05. for subheading, 8703.22 310, 8703.23 311, 8703.23 312, 8703.23 313, 8703.24 310, 8703.31 310, 8703.32 311,8703.32 312, 8703.33 311, 8703.33 312, 8703.90 321, 8703.90 322, 8703.90 323 and 8703.90 324

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings

Differences in Business environment / practices Mutual recognition of users Criteria for batching the Customs Declaration % of data reusability User readiness (for those with back-end system)

Differences in Industry / Customs Processes Exporting Country Malaysia x Export Declaration Shipper Shipment & Declaration Information Forwarding Agent Forwarding Agent Declaration Information Declaration Information Malaysian Customs x Customs Declarations Customs Broker Constraints Forwarders do not submit export declaration Exporting Customs Broker do not know the Malaysian Forwarders Customs Export Declaration Exporting Customs

Example of data reusability (MY – SG) Based on mandatory fields in a Customs declaration, required by Customs Malaysia For eDeclare application Total mandatory fields = 44 Total fields mapped by CBeX = 31 Total default fields in eDeclare = 4 Total field to be keyed in by FA = 9 Auto-population & default = 80 % Manual key-in by FA = 20 %

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings

Findings All Customs Authority adopted UN/EDIFACT CUSDEC message specification Implementation of CUSDEC varies Adopted UN/CEFACT Trade Facilitation Recommendations such as LOCCODE, INCOTERMS and etc Missing link – key field for matching of Export Declaration and Import Declaration It takes 2 to “Tango” Both Sender and Recipient must be willing to share the declaration information with their counterpart on the other side of the border The Sender and Recipient on both sides of the border must have technical / system readiness in order to participate in electronic declarations

Outline Brief Definition of Electronic Cross-Border Declarations The Two Aspects of Cross-Border Declarations Challenges Experienced The way forward

The way forward Business To provide more value-added services Use of other data source for population of Customs Declaration e.g. Invoice, Packing List and etc. Exchange of Customs Responses To resolve the “last mile” issue Develop solutions that enables the cross-border document exchange Share experience in different national forums Trade Facilitation Council National Single Window Committees Malaysia Standards Organization – Technical Committee for E-Commerce

The way forward Technical Identify International formats for adoption: WCO Data Model UNeDocs Alignment of documents structure in the Customs Declarations on both sides Harmonization of Information Parameters and Formats Implementation of the Unique Consignment Reference (UCR) concept

Thank You Eva C. P. Chan eva@dagangnet.com ECONOMIC COMMISSION FOR EUROPE (UNECE) United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Eva C. P. Chan eva@dagangnet.com