1 Challenges and practices in implementing Single Window in Japan How NACCS contributes to fulfilling our Missions: Speedy & Proper Clearance October 2011 Harumi Chikada Deputy Director, Information Management Office Customs and Tariff Bureau Ministry of Finance, Japan APEC Regional Workshop on Single Window

2 Outline I. Overview of Single Window (SW) system in Japan II. Background of SW initiative III. Development of SW IV. Challenges V. Key enablers to success VI. Conclusion

3 I. Overview of Single Window system in Japan

4 I. Overview of Single Window System in Japan  NACCS (Nippon Automated Cargo and Port Consolidated System) playing a pivotal role in achieving Single Window  Established status of NACCS as a comprehensive international logistics information platform, where Customs and private sector share information, enabling complete cargo tracking, quick response, high credibility and more  Developed in a phased manner since 2003  Going beyond Single Window – System Integration  6 government agencies participate in Single Window (agencies related to customs, port authority, quarantine, immigration, trade control, food sanitation, veterinary and plant health)  Facilitation of import / export procedures across government agencies  Simplification and harmonisation of import / export procedures, supported by uniform processing through IT system  Enhanced convenience of users ⇒ Enhancement of international competitiveness of logistics in Japan Features Effects

5 II. Background of SW initiative

6  It was necessary to submit similar but different documents for various government agencies → Duplicated work to process documents which requires more time and cost  Different stages of computerisation of various agencies → Mixture of paper-based and system-based processing  Various systems, not interconnected → Needed to file to all the concerned systems  Political impetus, political leadership - Cabinet decision to enhance paperless environment regarding import/export and port procedures (July 2001) - International logistics Reform Plan (Shiokawa Initiative) presented by Finance Minister to Cabinet members (August 2001)  Coordination mechanism across agencies - Liaison Council for Import/export and Port Procedures-related Ministries and Agencies (September 2001 – July 2003) Previous status: opportunity for improvement Driving force

7 III. Development of SW

8 III. Government Agencies participating in SW Agency in chargeProcedures Name of System (prior to system integration) Ministry of FinanceCustomsNACCS (Nippon Automated Cargo and port Consolidated System) Ministry of JusticeImmigrationCrew Immigration Support System Ministry of Land, Infrastructure, Transport and Tourism Port AuthorityPort EDI Ministry of Economy, Trade and Industry Trade ControlJETRAS (Japan Electronic open network TRAde control System) Ministry of Health, Labour and Welfare QuarantinePort EDI Food SanitationFAINS (Food Automated Import notification and inspection Network System) Ministry of Agriculture, Forestry and Fisheries Plant HealthPQ-NETWORK (Plant Quarantine NETWORK system) VeterinaryANIPAS (ANimal quarantine Inspection Procedure Automated System)

9 NACCS JETRAS (Trade Control) FAINS (Food Sanitation) ANIPAS (Veterinary) All Users NACCS (Customs) INTERFACE SYSTEM Port EDI (Port Authority) (Quarantine) Immigration First Generation (From Jul. 2003) Simple Interfacing SW System Less User Friendly All Users Common Portal Port EDI (Port Authority) (Quarantine) Immigration (Customs) JETRAS (Trade Control) ANIPAS (Veterinary) PQ-NETWORK (Plant Health) New Generation (From Oct. 2008) Common Portal SW System User Friendly New Dimension (Partially from Oct and complete by Oct. 2013) Integrated NACCS Very User Friendly, Less Cost NACCS All Users Common Portal ANIPAS (Veterinary) PQ-NETWORK (Plant Health) (Customs) (Port Authority) (Quarantine) (Immigration) (Trade Control) Current System Merged in Oct From Oct Integrated NACCS All Users (Customs) (Port Authority) (Quarantine) (Immigration) (Trade Control) (Food Sanitation) (Veterinary) (Plant Health) FAINS (Food Sanitation) 9

10 NACCS Trade Control Food Sanitation Veterinary All Users NACCS (Customs) INTERFACE SYSTEM Port System (Port Authority) Quarantine Immigration First Generation (July 2003-) : Interfacing SW System Although this SW system give a basic benefit of SW to the users, it is not so user friendly compared with Common Portal SW. A user is required to obtain and manage multiple IDs and passwords issued by individual OGA systems, and to consult with many help desks if some troubles occurred. Each OGA system is owned and operated by respective OGA. Plant Health More importantly, besides the benefit of SW function, interfacing Customs system with OGAs’ allows declarants to process customs procedure and OGAs’ concurrently. Without the interfacing system, declarants are required to take OGA procedures first and then customs procedure at last as the customs is required to confirm all the necessary official requirements completed prior to the release. It’s so called one by one process which is much more time consuming than the concurrent process.

11 NACCS All Users Common Portal Each OGA system is owned by respective OGA but daily system operation is managed by the administrator of the Common Portal (NACCS Center) because all queries on the system operation come to the help desk of the Common Portal. Port Authority Quarantine Immigration Customs Trade Control Veterinary Plant Health A user is merely required to obtain and manage one ID and password issued by the Common Portal Administrator (NACCS Center), and to consult with Common Portal’s single help desk. New Generation (October 2008-) : Common Portal SW System Food Sanitation More User Friendly System

12 Ultimate Solution (partially from October 2008, complete by October 2013) : Integrated NACCS All Users (Customs) (Port Authority) (Quarantine) (Immigration) (Trade Control) (Food Sanitation) (Veterinary) (Plant Health) Very User Friendly, Less Cost Advantage of Common Portal Plus Less development cost by avoiding the duplication hard and software (No Common Portal) Less system maintenance cost by the integration of hardware More user friendly service by allowing OGA applicants to use cargo information Quicker response due to the single system (No network between the systems)

13 Two critical components of trade facilitation Declaration Input an approval or permit number of OGA Permission OGA Database within NACCS (Common Portal/ Interface Server) Matching Approval or permit number, Importer & Commodity NACCS Even if Single Window is operationalised, if there is no link between database of Customs and those of OGAs, importers/exporters still need to physically present paper permits of OGAs to Customs for clearance, which requires more time… ⇒ Two Critical components for facilitated release: ① Single Window (single submission to various OGAs) + ② Link of database between Customs and OGAs

14 IV. Challenges

15 IV. Challenges  Varying level of computerisation at various OGAs  Diversified business operation for similar procedures – diversified data elements, code, timing of entry, etc. – simplification and harmonisation way into the future  Negotiation with OGA was difficult  New Generation SW or System Integration needed very tough negotiation over the controversial issue: who would be the leading agency?

16 V. Key enablers to success

17 V. Key enablers to success ①  Political impetus  Leading agency Firm commitment at ministerial level - ‘Use’ of Cabinet Decisions as strong driving force across agencies, with deadline - Initiative presented by minister, shared by Cabinet members Coordination mechanism among concerned agencies - Cabinet decisions with clear targeted date - Liaison Council for Import/export and Port Procedures-related Ministries at directors level - Frequent meetings among concerned entities (Customs, OGAs, NACCS Center, system vender) Established status of NACCS as a comprehensive international logistics information platform, where Customs and private sector share information, enabling complete cargo tracking, quick response, high credibility and more - It was obvious that the customs must be a leading agency (Traffic Burden of NACCS: Customs:60.93%, OGA:0.51%, Private:38.56%) Contributing factors

18 V. Key enablers to success ②  Simplification and harmonisation of data elements Simplification and harmonisation of data elements - Definition of each data element (e.g. What is ‘consignee’?) - Coding structure -- Number of characters/digits, types of characters (numeric, alphabetic, marks, etc.) -- Order of entry (e.g. last name, first name, middle name) Harmonisation of the timing of submission - Similar documents with slightly different timing - Different documents but same timing Contributing factors July 2003 (just after the introduction of SW system for Port Clearance) Declaration forms: 16 Pre-arrival forms: 5 Data Elements: 600 November 2005 (after revision of forms and data elements in order to adopt FAL Convention) Declaration forms: 8 Pre-arrival forms: 1 Data Elements: 200

19 V. Key enablers to success ③  Stringent project management Expertise of project management - Established status of NACCS as a comprehensive international logistics information platform, dating back to 1978, with a number of upgrades - Expertise on what to do, when, how Expertise of coordination - NACCS which has been developed and operated in a framework of PPP - Experiences in coordination between Customs and private sector in upgrading NACCS, which can be applied to coordination process with OGAs - Secondment of officers (from MOF, OGAs) to NACCS Center to share institutional expertise Stringent management - Coordination meeting among Customs, NACCS Center, OGAs and system vender to identify issues, tasks, responsible parties and to monitor progress - Waterfall model - sequential design process used in software development process, in which progress is seen as flowing steadily downwards (like waterfall) Contributing factors

20 VI. Conclusion

21 VI. Conclusion  Whole government approach with driving force  Business Process Reengineering as critical enabler – how best to take opportunity to change business models, to be best in conformity with unified processing of IT  Grand design over mid-term and long-term – phased approach or one stroke approach?

22 Thank you