11th AWC Meeting
April 2017
ASEM ACTION POINT 8
PAPERLESS CARGO CLEARANCE PROCESSES
WITHIN AND ACROSS BORDERS
REPORT ON
SURVEY FINDINGS AND RESULTS
INTRODUCTION
There is a strong permeation of Information Technology (IT) in our lives as
FANGs (Facebook, Amazon, Netflix, Google) become the trending statement of our
society. International trade processes and Customs procedures cannot remain
insulated from this all pervasive change. Thus, we find an increasing use of electronic
communications by regulatory agencies, trade and transport actors in their work.
There has been a significant rise in trade-related data and documents in electronic
form within and across borders. Electronic cargo clearance and paperless trade
processes underpin most of the trade facilitation measures that are mandated in the
WTO Trade Facilitation Agreement (TFA). Countries that have embraced paperless
processes in Customs have enjoyed the attendant benefits of building greater
efficiency therein.
The new focus on automation has led to the WCO declaring the theme for 2016
as ‘Digital Customs: Progressive Engagement’. The UNECE in its study, ‘A Roadmap
towards Paperless Trade’ says that “switching from paper documents would increase
security and transparency in supply chains and provide Governments and the private
sector with higher revenues.” The availability and use of ICTs is one of the pillars in
the Enabling Trade Index of the Global Enabling Trade Report, 2014, of the World
Economic Forum. Against this backdrop, during the 11th ASEM Customs Directors
General / Commissioners meeting, at Goa, in October 2015, a new action point viz.
‘Enabling Paperless Cargo Clearance Processes Within and Across Borders was
made part of the Goa Declaration. India and Benelux Customs administrations
volunteered to work on sharing best practices and status of implementation of
paperless environment in Customs.
With a view to taking the Action Point forward, it was proposed to conduct a
survey, with the aim of knowing the maturity level of various Customs Administrations
in paperless Customs processing. The results of the survey will be a tool for further
analysis and sharing of best practises in this regard.
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April 2017
OBJECTIVES
The survey on ascertaining the automation level in end to end Customs processes
was developed with the following objectives:
•
Aim of knowing the maturity level of various Customs administrations in
paperless Customs processing. Results from the survey will therefore form a
useful indicator of the varying maturity levels of digitisation in ASEM members.
•
An analysis about the level of preparedness of countries to activate their
interconnectivity with other Customs administrations. Since the survey is
exhaustive and covers connectivity with stakeholders and other regulatory
agencies,the results will give an indication about the the digital divide prevailing
amongst countries. Maturity of interoperability between Customs and various
border regulatory agencies, logistics operators and other stakeholders in a
single window environment within a country can also be infered from the results
of the survey.
•
To ascertain the level of parallel paper processing existing in an automated
environment within a country.
•
The above findings will further help in ascertaining Customs administrations’
readiness to embark upon a digital handshake with other Customs
administrations through a bilateral or a multi-lateral arrangement.
STRUCTURE AND METHODOLOGY
The survey evaluates the canvas of paperless Customs in a Customs
administration from the following dimensions:
a. Customs core processes like import and export declaration processing,
transit procedures, refund process etc;
b. Interconnectivity with stakeholders such as banks, ports / custodians,
carriers;
c. Interconnectivity with other border regulatory agencies such as
quarantine, food safety and security, licensing requirements etc;
d. Internal Functional Evaluation of the state of play of automation within a
Customs administration.
The survey was exhaustive and the format was based on multiple choice questions
and open questions.It broadly covered end to end goods clearance process in order
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April 2017
to understand the level of digitisation in the entire clearance eco system. It contained
the following segments :
Export and Exit
A. Export declaration process
B. Interconnectivity with stakeholders such as banks, ports / custodians, carriers
C. Interconnectivity with other border regulatory agencies such as quarantine, food
safety and security, licensing requirements etc
Import and Entry
D. Import declaration process
E. Interconnectivity with stakeholders such as banks, ports / custodians, carriers
F. Interconnectivity with other border regulatory agencies such as quarantine, food
safety and security, licensing requirements etc
Internal Functional Evaluation of the state of play of automation within a
Customs administration
G. Internal sharing / data reuse
H. Internal Functional Evaluation
The survey was circulated to all ASEM members in May 2016, after the Brunei
ASEM meeting, in April 2016.
As on April 2017, 36 responses (23EU/13Asian) have been received. A
multidimensional analysis of resonses has been attempted in order to deduce the key
findings. A statistical summary of the responses was prepared indicating the % for
each question for each category of response viz- yes, no paper required, paper also
required and no (which shows there is no automation). The Asian and the European
responses were indicated separately to enable diagnosis about the prevalent trends.
In order to assess the level of digitisation, the average percentage of responses in
Asia and Europe has been prepared by adding the responses in category 1 and 2 vizyes, no paper required and paper also required. Country wise depiction of responses
to indicate the level of maturity in automation as low, medium and high has also been
done. The responses in less than 50% category have been further highlighted to
emphaisize the focus areas for future work.
KEY RESULTS AND FINDINGS
The emergent, over arching key findings and results and from the survey are as
below:
1. Most countries – both Asian and European have high degree of automated
processes (70-90%) in the Customs core processes of export and import.
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11th AWC Meeting
2.
3.
4.
5.
6.
7.
8.
9.
April 2017
These cover preparation and filing of documents, amendments to declarations,
information regarding inspection of documents and payment of duty.
In internal functional evaluation,publication of information, fees and
charges and enforcement functions are showing higher level of
automation than the functions pertaining to dispute resolution,
availability of penal provisions and publication of average release times.
Again this trend is common between Asia and European countries.
The establishment of Single Window (SW) – which is a vital component for
CBM and a tool for regional integration as well, gets a high percentage of
being implemented across Asian and European countries. The degree of
implementation level varies. Here while 48 % of European responses say yes
to fully established, 30% in progress and 22% say no, 70 % Asian countries
say fully implemented and 15 % in progress while 15% are not yet
implemented.
The inference from high degree of SW being fully established is that there is
high possibility of moving towards a regional SW concept, which is a significant
finding and is also substanitiated by the growth of regional SW projects in Asia
and Europe .
Another vital result that is emerging is that a higher percentage of countries in
both Asia (83%) and Europe (65% & in addition, 15% as per EU) are in a state
of preparedness to initiate interconnectivity with other Customs
Administrations, within own region and outside the region as well. This again
augurs well for future projects in digital customs.
However when we look at the state of pilot projects in existence, we find that
the above finding is in contrast to the level of readiness for it, as larger number
of responses - 80% in Asia and 60% in Europe say no to the question . The
challenges behind this therefore need to be further defined and
addressed.
Since legal validation of digitised processes often poses a challenge to
automation, it is encouraging to see that most countries (Asian 77%, European
87%) give the same degree of legal recognition to electronic communication as
to corresponding paper documents.
Responses indicate that there is still a significant level of parallel paper
processing that is existing along with digitisation. The trend is more high for
Asian countries which average at 12% as compared to European
countries trend of 7%. In specific questions for e.g.2(a), 5(e) & 6(d),the
cumulative % is as high as 50% for Asian and 32 % for Europe.
The costs associated with parallel paper processing for exchaning core
information are estimated at 5-10% of the value of total world trade (UNECE
project on UNeDocs). IATA estimates paper trade handling document handling
costs about US$1.5billion annually. The benefits of reducing paper
documentation are well known. The WTO Agreement on Trade Facilitation also
has specific provisions in Article 10 for acceptance of e-documents. The survey
findings on high parallel paper processes present a crucial area for future work
wherein a framework for mitigating them can be designed.
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April 2017
10. Another key finding is that automation in the stakeholder connectivity
averages at less than 60% for both Asian and European countries. For
connectivity with other regulatory agencies the Asian/European average
is less then 50%. The trend is therefore common and the finding presents
another future area of work for the countries to ensure that the entire ecosystem
involved in the clearance of goods reaches an optimum level of automated
processes.
11. Highest maturity level of paperless processes are seen in Korea and
Singapore in Asia and Czech Republic and the Netherlands in Europe.
Singapore and the Netherlands are pioneering countries in automation as well,
having started in the 1980s itself.
12. Geographical indications show that in Asia the trend for digitisation
increases as one moves from west to east. European countries do not
reflect any such trend. Another interesting find is that while a land locked
country in Asia - Lao PDR has been slow in adapting to paperless processes,
the Czech Republic – a landlocked European country is the leader in paperless
processes. It is here that handholding becomes siginificant.
13. The findings illuminate the digital divide that runs across countries by showing
the different maturity levels of automation achieved. To move to a digital
handshake is not an impossible objective, provided the countries which are
slower than others are handholded and can benefit from the experience of more
advanced countries.
14. It also becomes evident that full degree of automation is a gradual process
as most countries started automating in the 1990s and are still looking at a time
frame of 0-5 years to achieve full automation. The EU member states also rely
on the Multi-Annual Strategic Plan (MASP) deploying a European customs
electronic environment by 2020.
15. More pilot projects on an automated basis and more sharing of innovations
and best practises will assist in reaching the next level of cross border
integration of Customs processes in a digitised manner. India and Benelux are
already emabarking on one such pilot project on SPS certificates.
Thus, these key findings and results will form the pivot for enhancing the
understanding of emergent trends of automation in ASEM countries. They will serve
as a useful indicator for level of existing digitisation and can inspire the countries that
started late, to reach out to the pioneers and benefit from their experiences. This will
lead to development of roadmaps to enable more cross border connectivity and
integration, which is the desired outcome of this exercise.
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