1. Mechanisms of Co-operation - The Role of the Business Community How to Achieve Maximum Trade Facilitation in a Regulatory Environment SGS Société Générale de Surveillance S.A., Geneva 15 May, 2003 UN ECE SECOND INTERNATIONAL FORUM ON TRADE FACILITATION

2. 2 Keys to Trade Facilitation Compliance by trade Government-trade and government-government co- operation Tools to facilitate communication, verification and validation Infrastructure Simplified regulations and procedures

3. 3 Opportunity to accelerate trade facilitation UN ECE and various trade facilitation organisations and consultants have been recommending certain trade facilitation measures for years but the extent of implementation is, in many cases, very limited. Recent additional security and compliance measures provide a window of opportunity to accelerate long awaited trade facilitation measures to ensure that compliant traders benefit from facilitated trade. There's increasing demand for :-  ADVANCE VALIDATED INFORMATION: to facilitate early risk profiling and identification of high risk transactions  EXCHANGE OF INFORMATION: between the parties in the supply chain for both regulatory and facilitation purposes

4. 4 The need for greater use of key trade facilitation measures Authorised Trader or Authorised Supply Chain : simplified procedures for parties with good compliance records Risk profiling : to facilitate low risk and target high risk Single Window : single authority receiving import/export information from trade/transport operators and co-ordinating exchange of information between applicable government departments Seamless integrated international trade transaction : key information submitted to customs in country of export to be used by customs in country of import

5. 5 How can the business community help ? Private sector service providers can assist be offering a variety of services and tools including :-  Certification Services  Risk profiling systems and information  Communications and management systems  Validation, verification and information services Traders and supply chain parties can :-  Voluntarily demonstrate compliance with security and import/export requirements  Co-operate with information exchange  Simplify and align their systems and procedures e.g. taking into account UN ECE Recommendations.

6. 6 International Supply Chain Compliance Standard Existing supply chain security standards, such as those of the Business Anti-Smuggling Coalition (BASC), US Trade Partnership Against Terrorism (C-TPAT) and the Technology Asset Protection Association (TAPA) could be used as a basis for establishing one international standard for the whole supply chain. Such a standard could have a general section applicable to all parties and specific sections applicable to each individual party (manufacturer, seller, forwarder, transporter, importer, etc.). For trade facilitation purposes, the Standard should cover not only security but other compliance issues relevant for import / export clearance such as health, phyto-sanitary, safety, customs classification, valuation, rules of origin, etc. Compliance with such a standard could be verified by Customs and/or accredited certification bodies.

7. 7 Certification services to demonstrate compliance Parties in the supply chain should have the opportunity to voluntarily demonstrate their compliance with governmental requirements in exchange for trade facilitation benefits. Such compliance can be demonstrated by requesting accredited certification bodies to conduct periodic audits and certify the party's premises / systems / procedures against a new international supply chain compliance standard. Some accredited certification bodies already have experience in supply chain security audits Such certifications of supply chain parties would be recognised by customs and other authorities for granting simplified clearance procedures. Certification procedures could be similar to those currently used for ISO 9001, ISO 14001, SA 8000, OHSAS 18001, etc.

8. 8 Validation of export data India, with support from some developing countries, has proposed to WTO that customs administrations in importing countries may request customs administrations in exporting countries to provide export data, in specific doubtful cases, to assist in combating valuation fraud. Problem Generally, Customs administrations are not concerned with, or staffed for, verification of the accuracy of data declared by the exporter. Frequently, the level of detail contained in export declarations is inadequate for customs valuation purposes. Solution Customs administrations to be provided with additional resources to carry-out the required investigative work to validate the export data, or Customs out-source the validation to accredited verification companies

9. 9 Risk Profiling  One tool is "SGS Profiler" which is a knowledge based risk management system to provide government agencies with a transparent, efficient and rapid means to:-  target high risk shipments for further examination and  provide trade facilitation for low risk shipments.  Builds up risk databases from global knowledge of trade practices and historical information on detections of smuggling, fraud, mis-declarations, violations, etc.  Oracle based and web-enabled

10. 10 Transaction Data SGS Profiler Risk Message Risk Information Risk Databases 1 2 3 4 SGS Profiler – How It Works Risk information is collected world wide and is stored in SGS Profiler’s risk databases Transaction data is then sent to Profiler. This can be in any form provided that it is electronic. It can be sent as flat files attached to an email or entered online. The same attributes in the transaction (names etc) are then filtered past the same attributes in the risk information databases The final output is a risk message tailored to the client’s requirements.

11. 11 Technical RisksPhysical Risks Risk information within these databases is sorted according to the types of risk. Risk information can be low risk and high risk

12. 12 Taiwan – False Engine Number Photo by SGS Taiwan Hong Kong – Concealment Photo by SGS Security Taiwan – False Labeling and Misclassification Photo by SGS Security SGS Profiler – How it Works The risk information is of a qualitative nature reflecting actual risk situations that have occurred in historical trade transactions Singapore – Smuggling Photo by SGS Security Hong Kong – Goods Substitution Video by SGS Security

13. 13 DIS AFGO Banks Freight Fwdr Customs GPHA MOF Freight Station Shipping Lines MOTI Traders Ghana Communications Network : undergoing change

14. 14 DIS AFGO Banks Freight Fwdr Customs GPHA MOF Freight Station Shipping Lines MOTI Traders Networking all parties to a common platform... Ghana Communications : future network

15. 15 Ghana Community Network Services Ghana Community Network Services Ltd. is a Government /private sector joint venture with mandate to provide an EDI service with a customs management system Ghana TradeNet is the EDI system GCMS is the customs management system

16. 16 Premier TowersCEPS HQ CEPS Officers interfaced to GCMS GCMS Server Trading Community Interfaced to TradeNet Banks interfaced To GCMS Shipping Lines TradeNet Server All other Agencies Interfaced to TradeNet: MOTI MOF Statistical Service VAT, BOG…

17. 17 GC Net Objectives improve speed of import clearance protect Government revenues improve transparency reduce customs officer discretion enhance management information and trade statistics initial focus on customs process

18. 18 Ghana TradeNet / GCMS Implementation Phase 1 : focus on Customs Clearance process Implementation:  Accra airport : November 2002  Tema port : April 2003  Takoradi port and land entry points : August 2003 Clearance can now be achieved in hours instead of days