Meeting the e Commerce challenge Post Customs Electronic

Agenda – Postal Supply Chain & Electronic Data Flow – Formal Basis Documents –

Postal Supply Chain & EDI message flow EDI (XML) message Post-Customs: POSTAL TECHNOLOGY CENTRE

The UPU Electronic Message Network ØStandard EDI network (POST*Net) operated by UPU ØSince 1996

Basis for the Customs treatment of postal items – Kyoto Protocol Annex J –

Basis for the Customs treatment of postal items (2) — WCO PTC decision (2011)

Basis for the Customs treatment of postal items (3) – UPU Convention Article 9

Basis for the Customs treatment of postal items (4) – Under development: « Postal

Why electronic pre-advice for postal items ? – Legal requirements • US, China, EU

How can cost be minimised ? – Usage of UPU-WCO standard • Avoids costly

The cost of inactivity – Postal items piling up • With growing international e.

Major benefits • • Reduce handling time at Posts and Customs and increase throughput

Electronic Exchange Post-Customs EDI (XML) messages: – CUSITM • electronic version of paper customs

Message Flow CUSITM/CUSRSP/ITMATT Item level details captured at origin country CUSITM Post in origin

UPU Customs Declaration System (CDS) – The UPU created with CDS a full management

UPU CDS V 1 Work & Data flow e. Commerce UPU Feedback CUSRSP POST*Net

Functionality overview: Ø Ø Ø Ø Postal Declaration data capture (web service) Import/export declaration

UPU CDS V 2 new functionality CDSv 2 SP 2 release in April 2014

Integration of CDS into other systems Postal systems Point of Sales Back office /

The steps to electronic Customs data exchange – Cooperate with Posts ● Agree processes,

The steps to electronic Customs data exchange (2) – Agree on the data to

New Opportunities – Prepayment of Customs taxes/duties by sender or receiver ● Avoids keeping

UPU CDS Central – pilot exchanges (May 2014) Own solution – ready to send/receive

UPU CDS – Local Pilot environment installations • Czech Republic Q 4 2013 •

Postal Export Guide (PEG) – Context The PEG replaces two UPU publications by a

Postal Export Guide & Customs Matters Guide - usage Edit Validate Public Postal Operator

Customs Matters Guide - usage «P» information by Post «C» information by Customs POSTAL

Customs Matters Guide - usage Post. Customs relationship POSTAL TECHNOLOGY CENTRE (DOT) © UPU

Postal Export Guide - Prohibited and restricted articles by UPU: • Import the WCO

Postal Export Guide - Prohibited and restricted articles live turkeys prohibited preparations of turkey

Prohibited and restricted articles – edit restriction Now the global note is attached to

Prohibited and restricted articles – edit restriction on banknotes POSTAL TECHNOLOGY CENTRE (DOT) ©

Prohibited and restricted articles – edit restriction shows on the overview POSTAL TECHNOLOGY CENTRE

Thank you ! Questions ? please contact: Harald Weyerich Director Postal Technology Centre, UPU

CDS Example user interface Main user screen (Customs admin) POSTAL TECHNOLOGY CENTRE (DOT) ©

CDS Example user interface customer at Post office filling in a Customs Declaration Reserved

CDS Example user interface (Customs user) Select a Declaration. . and sort By columns

CDS Example user interface (Customs user) View a Customs Declaration & decide Automatic calculation

CDS Example user interface (Customs user) View Declaration history POSTAL TECHNOLOGY CENTRE (DOT) ©

CDS Example user interface Rules for each decision code (Customs admin) Manage Automated Customs

CDS Example user interface (Customs admin) Manage Automated Customs Responses (edit rule) POSTAL TECHNOLOGY

CDS Example user interface (Customs admin) Manage Automated Rating rules (edit rule) POSTAL TECHNOLOGY

CDS Example user interface (Customs admin) Defining and executing Own reports POSTAL TECHNOLOGY CENTRE

CN 22/23 forms POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved

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Meeting the e. Commerce challenge Post Customs Electronic Data Exchange Harald Weyerich Director UPU Postal Technology Centre POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved WCO Knowledge Academy 4 th July 2014 POSTAL TECHNOLOGY CENTRE 1

Agenda – Postal Supply Chain & Electronic Data Flow – Formal Basis Documents – Motivation for Electronic Exchange – Electronic Messages – The UPU Customs Declaration System (CDS) – Steps to the Electronic Data Exchange – Pilot countries – The Postal Export Guide (PEG) – CDS screenshots (Annex) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 2

The UPU Electronic Message Network ØStandard EDI network (POST*Net) operated by UPU ØSince 1996 Carrier ØPrivate peer-to-peer network through internet, 24*7 100% availability ØSecured transport (VPN, SSL) ØBusiness continuity Export customs ØPerformant (0 -5 min processing) POST*Net Track & Trace (barcodes) Import customs ØMonitoring & alerting service ØUsed by 170 postal operators ØVery affordable (cost-based) ØCould be used also by other Int’l Organizations Transit post Sender Export post POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved Level of detail: • Item, bag, dispatch consignment • Consignment Import post POSTAL TECHNOLOGY CENTRE Receiver • Item (declaration) • Item (query) 4

Basis for the Customs treatment of postal items (2) — WCO PTC decision (2011) At its 191 st/192 nd Sessions (22 to 25 March 2011), the WCO Permanent Technical Committee (PTC) decided: 141. Following this examination the focus group had concluded that in principle the WCO was in a position to endorse the data requirements of the CUSITM/CUSRSP, on the understanding that it was a living information technology (IT) messaging guide which could be improved continuously based on developments in this field, including the results of ongoing pilot projects. To that end, the focus group had also recognized that in the future, any minor gaps could be filled through mutual consultation between the two Secretariats 146. The Meeting took note of the analysis carried out by the IMSC, and of the UPU’s presentation on the CUSITM/CUSRSP. It endorsed, in principle, the design and content of the CUSITM/CUSRSP as a tool developed jointly by the UPU and the WCO, and agreed that it should be called “WCO-UPU Customs-Post Electronic Messages”. POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 7

Basis for the Customs treatment of postal items (3) – UPU Convention Article 9 (2012) • • 1 Member countries and their designated operators shall observe the security requirements defined in the UPU security standards and shall adopt and implement a proactive security strategy at all levels of postal operations to maintain and enhance the confidence of the general public in the postal services, in the inter ests of all officials involved. This strategy shall, in particular, include the principle of complying with requirements for providing electronic advance data on postal items identified in implementing provisions (including the type of, and criteria for, postal items) adopted by the Council of Adminis tration and Postal Operations Council, in accordance with UPU technical messaging standards. The strategy shall also include the exchange of information on maintaining the safe and secure transport and transit of mails between member countries and their designated operators. 2 Any security measures applied in the international postal transport chain must be commen surate with the risks or threats that they seek to address, and must be implemented without ham pering worldwide mail flows or tradeby taking into consideration the specificities of the mail network. Security measures that have a potential global impact on postal operations must be imple mented in an internationally coordinated and balanced manner, with the involvement of the relevant stakeholders. POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 8

Basis for the Customs treatment of postal items (4) – Under development: « Postal Model » for Security-related electronic pre-advice POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 9

Why electronic pre-advice for postal items ? – Legal requirements • US, China, EU – Security requirements • Pre-advice to be sent before item leaves country of origin • Confirmation of correct export processing to destination Customs and transport airlines • Provide possibility for security alerts back to origin – Reduce / maintain customs processing time • Customs decision making while item is on route • Possibility for « automated » Customs decisions for low-risk items • Postal volume increasing but not Customs staff • Direct inject possible from shippers/online shops POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 11

How can cost be minimised ? – Usage of UPU-WCO standard • Avoids costly bespoke IT interfaces • Planned interface with ASYCUDA (end 2014) – Usage of standard software • UPU CDS is currently the only IT system for postal customs declaration & security – More volume with same staff • By having the electronic declaration in advance (even before the item leaves the origin country), there is enough time to do risk analysis and rating • Automated pre-arrival preliminary decisions on selection for inspection and/or tax/duty rating for low-risk items saves manual workload, speeds up the import process and supports trade facilitation – Of course any pre-arrival decision can be overridden anytime POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 12

The cost of inactivity – Postal items piling up • With growing international e. Commerce volume and no staff increase, bottleneck situations will occur – Impact Ø Increase of elapsed time retailer-to-buyer = decreased citizen satisfaction Ø This will then be the opposite of Trade Facilitation POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 13

Major benefits • • Reduce handling time at Posts and Customs and increase throughput injection of electronic declarations directly from large mailers or internet – • Data entry by customers – not by the post ! declaration data can be fed into customs risk management systems – – better targeting, trend analysis and reaction to security incidents/threats – concentrate Customs resources on highest threat areas – advance sender/recipient information for security checks • better communication between Post and Customs • faster Customs clearance of mail items and improved service quality for postal customers • Pre-advice and Pre-clearance can be used to collect duties/taxes in advance • Security information/alerts can be fed back to origin country POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 14

Electronic Exchange Post-Customs EDI (XML) messages: – CUSITM • electronic version of paper customs declaration forms CN 22, CN 23, CP 72 – CUSRSP • electronic answer from Customs/Border Control to Post • item to be presented (mandatory) – duties/taxes/other information (optional, if possible) – security-related messages e. g. do-not-load msg Common UPU-WCO Standard compliant with WCO Data Model V 3 – ITMATT • reserved only for customs data interchange between Postal Operators POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 16

Message Flow CUSITM/CUSRSP/ITMATT Item level details captured at origin country CUSITM Post in origin country • Individual enters data online or at post office ITMATT Post in destination country CUSRSP • Post office enters data • Shipper submits data via IT interface • Capture at Hub or OE CUSITM copy CUSRSP Customs in origin country CUSRSP CUSITM Customs in destination country Styles: Ø Normal flow Ø Optional additional flow POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 17

UPU Customs Declaration System (CDS) – The UPU created with CDS a full management system for • Postal electronic pre-advice of merchandise to the destination Post/Customs • With separated functions for – Postal use (capture & route pre-advice message) – Customs use (pre-select, decide, rate & taxation) – Security use (referrals/alerts to be sent to import and/or export post) – Based on the joint WCO-UPU message standard – Customs can use CDS directly or interface it with its own risk/rating system – CDS is ready to use since 1 st Jan 2013 ! Ø Use central solution hosted at UPU or Ø Implement local solution (at post and/or Customs) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 19

UPU CDS V 1 Work & Data flow e. Commerce UPU Feedback CUSRSP POST*Net CUSITM ITMATT Configure • Selectivity rules • Rating rules (Tax calc. ) • Feedback-to-origin rules Shipper’s system Post Office CUSITM OE IPS CUSRSP OE CDS IPS CUSRSP CDS Risk Mgt export Post CUSITM/CUSRSP flow POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved export Customs optional flow import Post Partial information flow POSTAL TECHNOLOGY CENTRE Risk Mgt import Customs configuration 20

Functionality overview: Ø Ø Ø Ø Postal Declaration data capture (web service) Import/export declaration data (files or API interface) Route declaration to partner Post (ITMATT message) Route declaration to Customs/border control (CUSITM message) Create response from Customs (CUSRSP message) including decision and feedback information to be forwarded to origin Post Receive response from Customs (CUSRSP message) and possibly forward feedback information to origin Post View/review/list/select declarations Cancel declarations Transfer link to an image of the item (if provided by origin Post) Selectivity rule engine (automaticaly select action for items based on rules) Rating rule engine (automatically calculate tax/duty based on rules) FX (foreign exchange rate) management and conversion (convert currency values to local currency) Audit trail (track and trace for actions on a declaration) Interaction with IPS (UPU mail mgt. System) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE Customs X X X All Customs configurations are hidden to postal users ! X X X X 21

UPU CDS V 2 new functionality CDSv 2 SP 2 release in April 2014 – e-Commerce pre-clearance support. Option to send duties&taxes response to origin – Ability to define multiple rules for a given customs decision/autoresponse • E. g. Present if item is EMS from Switzerland or Parcel from Canada. – Ability to define your own user groups – Daily exchange rates feed – Improved user interface • Declaration layout, sorting of search, better support of non-standard mail item IDs, declared value in local currency – Operational process • Decision code and reason displayed on pop up screens in IPS, focus removed from «Close» button. Overall message look and feel improved (IPS 2013 SP 3) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 22

Integration of CDS into other systems Postal systems Point of Sales Back office / Sorter Postal website Shippers / large mailers Online shop Customs & security Office of Exchange Security Risk Mgt / fiscal e. g. ASYCUDA Web. API (automated & synchronous) • Web application interface – direct call with SOAP protocol File (automated & asynchronous) • Files containing declarations / responses in CUSITM/CUSRSP Purchase system CDS format Web Human Interface (manual) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved • Web screens for entry/query POSTAL TECHNOLOGY CENTRE 23

The steps to electronic Customs data exchange – Cooperate with Posts ● Agree processes, show available UPU standards (CUSITM/CUSRSP) and tools (CDS) ● Participate in a Post-Customs coordination team – Agree a pilot phase ● Using CDS Central at the UPU to learn, test and review updated process together with the Post ● Use samples from partners (real data) loaded into CDS ● Identify a possibly pilot corridor with one country ● No cost involved besides workload for the Post-Customs coordination team POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 25

The steps to electronic Customs data exchange (2) – Agree on the data to be sent back to the Post ● Decision, e. g. pre-clearance (before arrival in country) of low-risk items ● Feedback on import duties/taxes/other charges ● Feedback on additonal documents needed ● Possibly security related messages ● Possibility to forward import cost feedback from destination customs to origin post which can forward to shipper/online shop – Assess impact on both postal and customs processes ● Use opportunity to identify improvements in the process ● Identify usage of IT systems (e. g. Customs can start to use CDS, if they have no own system or they create an interface) – Plan the Integration project • To implement the electronic exchange of data POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 26

New Opportunities – Prepayment of Customs taxes/duties by sender or receiver ● Avoids keeping items in warehouse just for tax collection reason – Watchdog service • Shipper may cancel shipment and stop merchandise while it is in the postal supply chain (at outbound or inbound scans) • Customs can use the functionality to manage referrals and interdict items POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 27

UPU CDS Central – pilot exchanges (May 2014) Own solution – ready to send/receive ITMATT to/from CDS user PT BR 0 0 0 >1 s n o i t a r decla IN CA CZ (prod) AU GB CL UY US (prod) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved HU MA ZA HR UG POSTAL TECHNOLOGY CENTRE RS 29

UPU CDS – Local Pilot environment installations • Czech Republic Q 4 2013 • Canada Q 1 2013 (production planned Q 2 2014) • Portugal Q 4 2013 Pilot partners: • Australia Q 3 2014 • Canada Post • USPS – Piloting / Testing / Planning (CDS central) • Rep. of Serbia • Brazil • South Africa • Croatia • Chile • Nigeria Swiss. Post • Latvia • Morocco • • Portugal • India • Austria • Hungary • Malaysia • Philippines • Australia • Belarus • Thailand • Estonia • Uruguay POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved Are ready to exchange with any CDS user ! 30

Agenda – Postal Supply Chain & Electronic Data Flow – Formal Basis Documents – Motivation for Electronic Exchange – Electronic Messages – The UPU Customs Declaration System (CDS) – Steps to the Electronic Data Exchange – The Postal Export Guide (PEG) – CDS screenshots (Annex) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 31

Postal Export Guide (PEG) – Context The PEG replaces two UPU publications by a Web Service with enhanced possibilities for users. It can be separated in two sections: PEG Customs Matters Guide • • Customs Matters Guide – Single WCO–UPU Customs publication Result of a Questionnaire filled in jointly by Customs and Posts POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved Prohibited and restricted articles • • Electronic list of prohibited and restricted items Search facility by country, HS code and description POSTAL TECHNOLOGY CENTRE 32

Postal Export Guide & Customs Matters Guide - usage Edit Validate Public Postal Operator and Customs POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved UPU Web services Queries from any 3 rd Consult the via a web PDF party application interface POSTAL TECHNOLOGY CENTRE 33

Postal Export Guide - Prohibited and restricted articles by UPU: • Import the WCO HS Codes, maintain the system by country: • Translate each WCO HS Code description into the country language. • Set the admissibility rules at level of code or range of codes – Attach documents – Import procedures (local or global notes) – Charges • Manage WCO HS Codes extensions at country level • Textual search and code search. – Display all code results for a word search POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 36

Postal Export Guide - Prohibited and restricted articles live turkeys prohibited preparations of turkey meat are allowed POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 37

Prohibited and restricted articles – edit restriction Now the global note is attached to the selected good, further details can be added such as: • Charges ( ): monetary charges. • Attachments ( ): for example a form to fill. • Notes ( ): more information about the restriction. • Origin countries ( ): if this restriction applies only to certain origin countries. POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 38

Thank you ! Questions ? please contact: Harald Weyerich Director Postal Technology Centre, UPU harald. weyerich@upu. int POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 41

CDS Example user interface customer at Post office filling in a Customs Declaration Reserved for image (if available) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 44

CDS Example user interface (Customs user) View a Customs Declaration & decide Automatic calculation (if rules are defined) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 46

CDS Example user interface Rules for each decision code (Customs admin) Manage Automated Customs Responses (select rule) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved POSTAL TECHNOLOGY CENTRE 48

CDS Example user interface (Customs admin) Manage Automated Customs Responses (edit rule) POSTAL TECHNOLOGY CENTRE (DOT) © UPU 2014 – All rights reserved Flexible logical expression for rule definition POSTAL TECHNOLOGY CENTRE 49