1

Connecting Connecting Connecting Connecting Supply Chain in the Supply Chain in the Supply Chain in the Supply Chain in the RegionRegionRegionRegionPractices and Perspectives from PAA

Sung Heun HA (Rama)Director of Global Cooperation

KTNET

25 September 2012

Agenda

2 PAA Cross Border Framework

3

1 About Pan Asian e-Commerce Alliance - PAA

4 PAA Proposal on ASEAN e-Self Certification

PAA e-Certificate of Origin

2

About PAA

Asia Economies and PAA Members

1. China : CIECC

2. Hongkong : Trade Link

3. Indonesia : PT EDI Indonesia

4. Japan : NACCS

5. Korea : KTNET

6. Macau : TEDMEV

7. Malaysia : DagangNet

8. Philippines : InterCommerce

9. Singapore : CrimsonLogic

10. Chinese Taipei : Trade Van

11. Thailand : CAT Telecoms

3

PAA Membership

• IT, Network Service Providers, authorized by respective governments for electronic trade declaration and permits, and providing B2B and B2G local and cross border electronic messaging services on supply chain, logistics and financial transactions.

The PAA Mission• To enable secure and reliable transmission of trade and

logistics data and documents.

• To allow inter-connection of network services to provide e-Commerce transaction application services for the trade business community.

• To create a Pan-Asian portal to enable global B2B connection and communication.

4

PAA Value Proposition

• Comprehensive PAA Legal Framework– Safe and secure electronic documents exchange

– Mutual recognition of CAs/PKI

– Dispute resolution

• Facilitate Electronic Information Exchange, with reliable service backed by interconnection and service level agreement– Reduce administrative costs

– Faster transactions

– Opportunities for improved operations, inventory management and increased sales and revenues

PAA Cross-Border

Framework

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End User A End User B

PAA Policy Authority

Certification Authority B

Certification Authority A

Club Agreement

CPS-A

Certificate Policy

Country A Country B

CPS-B

PKI Mutual Recognition

CA Service

SecureCross Border TransactionServices

Subscriber Agreement-B

Recognition Agreement

Subscriber Agreement-A

Service Provider A

Service Provider B

Interconnection Agreement, SLA

PAA Legal Framework

PAA Agreements

• Subscriber Agreement with PAA Member Services Agreement, within the jurisdiction of the respective national eCommerce Act/Law, and the Rules on the Admissibility of Electronic Evidence in Court

• PAA Members' InterConnection and Service Level Agreement

• PAA Club and Policy Agreement, CA/PKI Mutual Recognition

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Pan AsianCertificate

Policy

EvaluateCPS againstCertificate

Policy

Confirm CA’s Operationis in accordance

with CPS

List ofAccredited

CA’s

Ac

cre

dit C

A’s

CommunityCA Certification

Practice Statement

(CPS)

Assess CA’soperationscomplieswith CPS

PKI Mutual Recognition

PAA Supported Documents

• Purchase Orders• Advance Shipment

Notice• Packing List• Commercial Invoice

• Bill of Lading• Air Way Bill• Sea Way Bill• Shipping Order• Delivery Order• Trade Declarations• Certificate of Origin

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CustomsClearance(Status)

PAA Cross Border Scenario

Declaratio

nS

ystem

PA

A M

ember (B

)

PA

A M

ember (A

)

AWB Information,INV, PL, Export Declaration

AWB, INV, PL and

Declaration Information

AWB Information, INV, PL, Draft Import Declaration

Exporting FA Importing FACustoms Broker

Customs System

Importing Customs

Customs System

Exporting Customs

Export Declaration,Manifest

Submission

Manifest,Import DeclarationSubmission

CustomsResponse

CustomsResponse

PAA Secure Doc Exchange :

• Inter-connection Agreement

• Legal Framework

Declaratio

nS

ystem

CargoVisibility

PAA e-Certificate of

Origin

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History

� E-C/O: An APEC ECSG Pathfinder Project

� Dec. 2004, pre-meeting between MOCIE (public sector), KITA and KTNET(private sector) of Korea and BOFT (public sector) and Trade-Van (private sector) of Chinese Taipei. Both sides reached an agreement to implement the cross border ECO exchange project using PAA framework.

� April 2005 and May 2006, the first and second official bilateral meeting between Korea and Chinese Taipei were held.

- Project scope and schedule was agreed

� Nov 2008, the third official bilateral meeting between Korea and Chinese Taipei was held.

- Signing ceremony of MOU for cross border ECO service

Third official bilateral meeting between Korea and Chinese Taipei

ContentsContentsContentsContents

Date � 2008.11.21, Taipei

Delegates

� Korea : MOTIE(Trade Policy Section),KTNET and

Korean Mission office in Taipei

� Chinese Taipei : MOE(BOFT), Customs,

Trade-Van

Agenda

� MOU signing for Korea-Chinese Taipei

ECO Transaction Service

� ECO Promotion Plan

� Bilateral Cross-Border Paperless Trade

Cooperation Measures

13131313

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Paper CO Scenario [Korea ► Chinese Taipei]

Repository

KTNET

Repository

KCCI

1CO APPORG

2ECO CERTIF

Exporter1CO APP

2ECO (for print)

Customs

Importer

4 Send Inv, P/L, Paper CO to Importer

Korea Chinese Taipei

Customs Broker

5 Pass the paper CO to Customs Broker

6 Import Declaration

7Supplement Paper CO

7Supplement Paper CO

National TreasuryAgency

Verify authenticity of

paper CO

Trade-Van

6 Declaration

Chinese Taipei Mission office in Korea

3CO for Seal and Certification

ECO Scenario [Korea ► Chinese Taipei]

Exporter

Repository

KTNET

Repository

Trade-Van1CO APP

2ECO (for view)

3Inv, P/L

(specify ECO Number)

3Inv, P/L,Attach ECO from repository

3Inv, P/L, ECO Importer

1CO APPORG

2ECO CERTIF

KCCICustoms

6Import Declaration ECO confirmed by importer

6Import Declaration Customs Broker

4 Sign to confirm ECOAssign Customs Broker

5 Generate Import Declaration Data

ECO Enquiry on KCCI Website

With ID and Password

Korea Chinese Taipei

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Benefits to Government

� Be the front-runner in trade facilitation among other countries

� Guarantee the authenticity of the cross border documents, reducing possibility of fake CO

� Reduce effort in paper CO verification

� Speed up customs clearance process and better service to trader community

Benefits to Exporters/Importers

Exporter� Save time and costs (courier express US$23) in applying and

sending over paper CO� No need to get a stamp/seal on the CO from Taipei Trade

Representative Office in Korea � save tremendous time (in average 3 days) and costs (US$17 per stamp, transportationcost US$20-40)

� Transmit cross border documents in a secure online environment

� Better service to their buyers

Importer� Speed up customs clearance process� Expedite cargo pick up � saving warehouse cost� Guarantee of authentic CO

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The Way forward

Cross BorderPaperlessTrading

eSPS

B2B(INV, PL,

PO)ECO

�In cross border paperless trading, there’re commercial documents (B2B) and regulatory-required documents(B2G); ECO is crucial since it involves both the public and the private sectors.

�Korea and Chinese Taipei are in discussion to expand the service to e-INV, e-PL and e-SPS

� In discussion with other countries such as Philippines and Thailand to exchange ECO

KoreaChina

Exporter

CCPIT

2. issue

3.data transmission

4. data transmission

5.electronic

declaration

6. electronic

declaration

1.applyCIECC KTNET

Importer

Custom

Model 1: Electronic data transmission

Korea-China e-C/O project (1)

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KoreaChina

Exporter

CCPIT

2. issue

3.data transmission

4. data transmission

5.Printed & Stamped

1.applyCIECC KTNET

Importer

Custom

6.declaration

Model 2: eCO local printing

Korea-China e-C/O project (2)

PAA Proposal on

ASEAN

eSelf Certification

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ASEAN Self Certification- Manual, Pilot Implementation

• ASEAN Agreement on Self Certification for Trade Facilitation

– Pilot 1: Initially Brunei, Malaysia and Singapore, and now with Thailand

– Pilot 2: Indonesia, Laos and Philippines

• ASEAN Self Certification: Operating Customs Procedures (OCP)

– Issuing Authority accredits exporter, endorse exporter signature to Customs at Importing country

– Exporter ‘certifies/signs’ on the Commercial Invoice indicating compliance of export products to ATIGA, and sends invoice as Invoice Declaration to importer

– Importer submits Invoice Declaration to Customs, as support document to Import Declaration

– Customs process Import Declaration, verifies Invoice Declaration (validate exporter signature)

1. Accreditation of Exporters by Issuing Authority

2. Submission of Invoice Declaration - Self Certification (Commercial Invoice, Packing List, Waybill)

- By Exporter to Importer

- By Importer to Customs together with Entry Declaration

3. Customs verification of Invoice Declaration

- Certification and Exporter Signature

- Invoice declaration vs Entry Declaration

4. Duty and Tax Assessment (based on AFTA) and Clearance

ASEAN Self Certification- Manual, Pilot Implementation

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Pilot Manual Self CertificationStep 1. Accreditation

Exporter Importer

Customs

SG, TH)

Customs(BR, MY, SG, TH)

Customs(Import)

Exporter Accreditation

CO Issuing

Authority

Accredited ExporterName and Specimen Signature

Challenges• Number of exporters in ASEAN to be authorized for Self Certification • Maintenance of Customs repository of authorized Names and

Specimen Signatures, eg 60,000-120,000

Pilot Manual Self CertificationStep 2. Invoice Declaration

Exporter Importer

Customs(Export)

Customs(Import)

Purchase Order

Invoice

ExportDeclaration,

Invoice,Packing List

ImportDeclarationInvoicePacking List,AWB/BL

Invoice Declaration

InvoiceDeclaration

ImportDeclaration,Packing List,AWB/BL

Challenges• Assurance of compliance to ASEAN ROO • Authenticity, integrity of Invoice Declaration, exporter signature

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Pilot Self CertificationStep 3. Verification

Exporter Importer

Customs(BR, MY, SG, TH)

Customs(Import)

CO Issuing

Authority

Invoice Declaration

InvoiceDeclaration

Retroactive Check

Exporter Certification And Signature

PAA Proposal to ASEAN

• PAA E-Self Certification Service– Adopt PAA Legal Framework, CA and PKI Mutual Recognition

and Interconnection Agreement for safe and secure electronic exchange of Invoice Declaration

• B2B : from exporter to importer, and

• B2G : from importer to Customs/NSW

– Adopt ASEAN Message Specification: Invoice, and the PAA Data Communication Protocol (ebMS)

• PAA Members in ASEAN– Indonesia : PT EDI Indonesia

– Malaysia : DagangNet

– Philippines : InterCommerce

– Singapore : Crimson Logic

– Thailand : CAT Telecom

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Premises:

1. ASEAN members agree to amend ATIGA ROO and OCP to to include guidelines to implement the eSelf Cert.

2. The Certificate of Origin Issuing Authority (Department of Foreign Trade or Customs, eg. Philippines and Singapore) to accredit and authorize exporters to do Self-Certification/eSelf Certification.

3. ASEAN Member (export) option to pre-qualified export products may be registered as compliant to the ATIGA ROO.

4. CO Issuing Authority option to require submission of e-Self Cert for monitoring exporter issuance of Self Certification.

5. Authorization of CA to issue digital certificates (PKI) to accredited exporters, adopt ASEAN Invoice data specification and PAA Message Exchange protocol (ebMS).

6. Customs (import) acceptance of valid E-Invoice Declaration as basis for applying applicable ASEAN ATIGA preferential tariff rate.

PAA Proposal on e-Self Certification

PAA Proposal on e-Self Certification

Proposed Scope of Work:

1. Establish a database of exporters authorized to Self-Certify. ASEAN members may agree on criteria for exporter e-Self Cert Accreditation.

2. Enable authorized exporters to electronically submit Invoice Declaration and use CA Digital Certificate to digitally sign Invoice Declaration; encrypted Invoice Declaration for transmission to buyer/importer

3. Enable automatic submission of Invoice Declaration to NSW; NSW to create Invoice Declaration database

4. Electronic validation of Invoice Declaration vs Import Entry

- Automated validation between NSW and Customs system, or -- Online viewing of Invoice Declaration via NSW

5. Generate Periodic Reports on Self Certification, Issuance per exporter and Utilization per importer, per country of origin, etc.

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eSelf-Certification Workflow

Exporter Importer

Customs(Export)

Customs(Import)

Export

DeclarationE-SelfCert Import

Declaration

E-SelfCert

(Invoice Declaration)

CO Issuing

Authority(Customs/Foreign Trade)

E-Self Cert E-SelfCert

NSW NSW

ASW

Purchase Order

Packing List,/Delivery Notice, (Invoice)

Export

Declaration

Import

Declaration

Customs

Service

Provider

PAAMember

Customs

Service

Provider

PAAMember

2 31

3 4

5

3B

1. Export Declaration

2. Preparation, Digital Signing and Submission of invoice/SelfCertthru service provider

- Online submission, or -

- Invoice XML upload

3. Receipt of e-SelfCert- Buyer (importer/consignee)

- NSW(Customs, Issuing Authority)

4. Submission of SelfCert to NSW (import)

5. Submission of Invoice Declaration by importer/consignee- Electronic, attached with import entry declaration (or, simply use invoice

number for validation)

- Invoice Declaration print-out (paper) + Entry, AWB/BL, PackingList, Permits/Licenses

eSelf-Certification Workflow

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eSelf-Certification Workflow

• Exporter submission of the Invoice/SelfCert to Buyer (B2B Exchange)

• Customs (import) receives eSelfCert

– Copy of eSelf Cert from exporter direct to Customs system or thru NSW, or copy of eSelfCert thru ASW from Issuing Authority-NSW (origin)

– eSelf Cert from importer as support document to import declaration

• Customs (import) validation of SelfCert submitted by importer

vis-à-vis SelfCert in NSW

eSelf-Certification Workflow

Exporter Importer

Customs

(Export)

Customs

(Import)

Export

Declara on

E-SelfCert Import

Declara on

E-SelfCert

(Invoice Declara on)

CO Issuing

Authority (Customs/Foreign Trade)

E-Self Cert E-SelfCert

NSW NSW

ASW

Purchase Order

Packing List,/Delivery No ce, (Invoice)

Export

Declara on

Import

Declara on

Customs

Service

Provider

PAA Member

Customs

Service

Provider

PAA Member

2 3

1

3 4

5

3B

APTA e-C/O

Provisions against

the Cross-Border APTA E-C/O Exchange

Provisions for

the Cross-Border APTA E-C/O Exchange

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• The PAA is composed of accredited service providers of their respective Customs authorities and Other Government Agencies.

• The PAA network and legal infrastructure is available in member economies. This may be extended to other economies.

• However, without the legal recognition of cross-border e-documents by its Governments, the benefit is limited

• Regional intergovernmental bodies with wide membership scope and proper mandate need to show leadership by initiating regional arrangement such as regional agreement

• Dynamic platform where both public and private sectors can openly share their views and concerns and communicate readily

Key Takeaway