ECONOMIC COMMISSION FOR EUROPE UNECE United Nations Centre

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 Geneva, Switzerland 3 - 5 May 2006 Page 2

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 Geneva, Switzerland 3 - 5 May 2006 Page 3

Outline Brief Definition of Electronic Cross-Border Declarations The Two Aspects of Cross-Border Declarations Challenges Experienced The way forward Geneva, Switzerland 3 - 5 May 2006 Page 4

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 Benefits Labour-saving Accuracy / error reduction Efficiency / speed Geneva, Switzerland 3 - 5 May 2006 Page 5

Scenario: Export Singapore – Import Malaysia Trade Palette 2. Export Declaration Geneva, Switzerland 3 - 5 May 2006 5. Declaration Data Dagang Net Gateway Singapore Exporter / FA Trade. Net Gateway 1. Export Declaration Email Notification 4. Pre. Declaration Message 3. Customs Response 6. Import Declaration Customs System Customs Singapore Customs Malaysia Page 6 6. Import Declaration e. Declare / Cargo Declare Malaysia Importer / FA Notes: 1. Singapore exporter / FA creates export declaration using Trade. Palette. 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 e. Declare / Cargo Declare database. 6. Malaysia importer / FA completes the import declaration for submission to Malaysia Customs.

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings Geneva, Switzerland 3 - 5 May 2006 Page 7

Free Trade Port (SG) Vs Conventional Customs port (MY) Free Trade Port 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 Geneva, Switzerland 3 - 5 May 2006 Page 8

Proximity Business practice Data availability Time factor Example Malaysia / Singapore Hong Kong / Macau Geneva, Switzerland 3 - 5 May 2006 Page 9

Exchange Of Import Declaration Email Notification Notes: Reverse flow of the previous scenario. This Scenario is to cater for 1. neighboring countries such as HKMacau, SG-MY& etc 2. Free Port that requires declarations to be submitted after cargo clearance such as HK Geneva, Switzerland 3 - 5 May 2006 3. Customs Response Customs System Customs of Importing Country Page 10 5. Declaration Data 6. Export Declaration Customs System Customs of Exporting Country Declaration System 2. Import Declaration 4. Pre. Declaration Message Export SP’s Gateway Importing FA Importing SP’s Gateway Declaration System 1. Import Declaration Exporting FA

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings Geneva, Switzerland 3 - 5 May 2006 Page 11

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 Geneva, Switzerland 3 - 5 May 2006 Page 12

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 Geneva, Switzerland 3 - 5 May 2006 Page 13

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 1 st Jan 2004) HS Codes for Non-ASEAN countries Customized codes / ID Vessel ID Exporter code / Agent code Geneva, Switzerland 3 - 5 May 2006 Cont… Page 14

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) Geneva, Switzerland 3 - 5 May 2006 Page 15

The Malaysia-Singapore Example: Differences in Customs Data Requirements Malaysia Singapore MALAYSIAN CUSTOMS DECLARATION 401110000 New pneumatic tyres, of Rubber. Of a kind used on motor cars (including station wagons and racing cars) 841480520 Compressors other than those of subheadings Nos. 8414. 30 and 8414. 40: compressors for automotive air-conditioners 871492110 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 Geneva, Switzerland 3 - 5 May 2006 SINGAPORE CUSTOMS DECLARATION 870899150 Page 16 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 Geneva, Switzerland 3 - 5 May 2006 Page 17

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) Geneva, Switzerland 3 - 5 May 2006 Page 18

Differences in Industry / Customs Processes Exporting Country Shipper Shipment & Declaration Information Malaysia x Export Declaration Forwarding Agent Declaration Information Customs Broker Customs Export Declaration x Customs Declarations Constraints • Forwarders do not submit export declaration • Exporting Customs Broker do not know the Malaysian Forwarders Exporting Customs Geneva, Switzerland 3 - 5 May 2006 Forwarding Agent Page 19 Malaysian Customs

Example of data reusability (MY – SG) Based on mandatory fields in a Customs declaration, required by Customs Malaysia For e. Declare application Total mandatory fields = 44 fields mapped by CBe. X default fields in e. Declare field to be keyed in by FA = 31 =4 =9 Auto-population & default = 80 % Manual key-in by FA = 20 % Geneva, Switzerland 3 - 5 May 2006 Page 20

Challenges Experienced Differences in Customs Procedures Differences in Customs Data Requirements Differences in Business environment/practices Findings Geneva, Switzerland 3 - 5 May 2006 Page 21

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 Geneva, Switzerland 3 - 5 May 2006 Page 22

Outline Brief Definition of Electronic Cross-Border Declarations The Two Aspects of Cross-Border Declarations Challenges Experienced The way forward Geneva, Switzerland 3 - 5 May 2006 Page 23

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 ECommerce Geneva, Switzerland 3 - 5 May 2006 Page 24

The way forward Technical Identify International formats for adoption: WCO Data Model UNe. Docs 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 Geneva, Switzerland 3 - 5 May 2006 Page 25

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