Connecting Supply Chain in the Region

A private sector initiative to facilitate cross-border paperless trade data exchange

Sung Heun HA (Rama)

Director Korea Trade Network (KTNET)

25 September 2012

Agenda

2 PAA Cross Border Framework

3

1 About Pan Asian e-Commerce Alliance - PAA

4 Challenges & Recommendation

PAA Cross Border Paperless Trade Services

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

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.

PAA Cross-Border

Framework

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

Secure Cross Border Transaction Services

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' Inter-Connection and Service Level Agreement

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

Pan Asian Certificate

Policy

Evaluate CPS against Certificate

Policy

Confirm CA’s Operation is in accordance

with CPS

List of Accredited

CA’s

A

ccredit CA

’s

Community CA Certification

Practice Statement

(CPS)

Assess CA’s operations complies with 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

PAA Secure Cross-Border Transaction Services

H*

By integrating the paperless trade services into the H* Company’s Supply Chain Management System, all trade related documents and information are sent to and received from partners into the system automatically

L/C and other trade documents: 4,800/year, Mill Sheet and others: 2,400/year

Purchase System

DB For

Each Coil

DB For

I/V, P/L, B/L info Data for Each Coil Data for

Each Coil Data for Each Coil Data for

Each Coil Data for Each Coil

Mill’s P/L

Invoice

Packing List

B/L Advice

ebXML, SSL

e-documents exchange over the paperless trade platform

Paperless trade embedded e-SCM system

CASE 1 : e-SCM

14

Purchase Control

Purchase Plan

Inventory

Order Plan Order Plan

L/C L/C

Advance Import Report

P/O

Status

B/L Advice

Invoice

P/L

Mill Sheet Mill Sheet

B/L Advice

Application for L/C

Order Plan

P/O

B/L Advice

Invoice

P/L

Mill Sheet

Advance Import Report

Status

Bonded Transportation

Bonded Transportation

Customs Clearance

Tariff return

Customs Clearance

Tariff return

L/C

ASP

EDI or

XML

Before

Bank Ministry Customs Bank Exporter Manufacturer Carrier KTNET ERP Importer

II. PAA Initiatives

CASE 1 : e-SCM

15

Purchase Control

Purchase Plan

Inventory

Order Plan

L/C L/C L/C

Advance Import Report

P/O

Status

B/L Advice

Invoice

P/L

Mill Sheet Mill Sheet

B/L Advice

Application for L/C

Order Plan

P/O

B/L Advice

Invoice

P/L

Mill Sheet

Advance Import Report

Status

Bonded Transportation

Bonded Transportation

Customs Clearance

Application

Tariff return

Customs Clearance

Application

Tariff return

Order Plan

After

Bank Customs Bank Exporter Manufacturer Carrier KTNET ERP Importer

II. PAA Initiatives

Ministry

CASE 1 : e-SCM

Mutual growth with Partners through the Increased Efficiency in Trade Business and Strengthened Business Ties

Direct Cost Saving : $ 1 Million / Y

Stable supply chain management •Transparent work process from Planning to Production

Less Human Resource •$ 1 Bil./8 Staffs (2003) $ 5 Bil./4 Staffs (2012)

Secure the Business with H* •Pre-order based production

High level customer service •Extension of same service to other Korean Customers => Hyundai Motors, Hyundai Heavy Industry

Enhance work efficiency •Less mistakes from documents handling •Lower work load from more work volume

Less System Development and Management Cost •PAA Standard e-documents and Web ASP service

Benefits for H* and Trade Partners

II. PAA Initiatives

CASE 1 : e-SCM

E-C/O: APEC ECSG Pathfinder Project Dec. 2004, preliminary-meeting between MOTIE (public sector), KITA and KTNET(private sector) of Korea and BOFT (public sector) and Trade-Van (private sector) of Taiwan province of China April 2005 and May 2006, the 1st and 2nd bilateral meeting - Mutual agreement on the implementation of the cross border ECO exchange project utilzing PAA framework Nov 2008, the 3rd bilateral meeting - Signing of MOU for cross border ECO service March 2010, official launch of ECO service

II. PAA Initiatives

CASE 2 : E-Certificate of Origin

Paper CO Scenario [Korea ► Taiwan, China]

Repository

KTNET

Repository

KCCI

CO APPORG

ECO CERTIF

Exporter CO APP

ECO (for print)

Customs

Importer

Send Inv, P/L, Paper CO to Importer

Korea Taiwan, China

Customs Broker

Pass the paper CO to Customs Broker

Import Declaration

Supplement Paper CO

Supplement Paper CO

National Treasury Agency

Verify authenticity of

paper CO

Trade-Van

Declaration

Taiwan province Mission office in Korea

CO for Seal and Certification

ECO Scenario [Korea ► Taiwan, China]

Exporter

Repository

KTNET

Repository

Trade-Van CO APP

ECO (for view)

Inv, P/L

(specify ECO Number)

Inv, P/L, Attach ECO from repository

Inv, P/L, ECO Importer

CO APPORG

ECO CERTIF

KCCI Customs

Import Declaration ECO confirmed by importer

Import Declaration Customs Broker

Sign to confirm ECO Assign Customs Broker

Generate Import Declaration Data

ECO Enquiry on KCCI Website

With ID and Password

Korea Taiwan, China

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, US$20-40 of travel cost)

Transmit cross border documents in a secure online environment

Better service to buyers

Importer Speed up customs clearance process

Expedite cargo pick up saving warehouse cost

Guarantee of authentic CO

Cargo Status Information

(with Export Manifest information)

Trucker Terminal

Export Declaration &

Manifest Loading Departure

Arrival Discharging

Import Declaration &Manifest

Bonded Warehouse

Trucker

Query by B/L number or Cargo Number

CIECC KTNET

DLN TJ NB

QD KCS (All Korea Ports) Origin Destination

Web Service

Forwarder Web

Trader

Web Service Trader

Forwarder Web

* Both Inbound and Outbound Model is applicable

Korea-China Cargo Visibility Project (II) Example of Korea-China Cargo Tracking CASE 3 : Cargo Visibility Service

Global Cooperation (APEC, ASEAL, AFACT, UN and etc..)

B2B2G Services Pre-Declaration

E-Manifest …

B2G Services

E-C/O eSPS

….

B2B Services

Secure Cross Border Transaction Service

Value Added Services

P/O

Inv

P/L Order Confirmation

Certificate

Visibility Financial Settlement

PAA E-Marketplace …

Etc..

ASN

Security (PKI) XML Document Networking (ebXML)

PAA Infrastructure

PAA Legal Framework

PAA as a Platform – PAA’s PAAS

PAA as a Platform – PAA’s PAAS

Quotation/ Bidding

Order Placement

Credit Check/Trade Performance Report

Business Matching and Negotiation

Import Declaration

Cargo Tracking

Customs Duty Import Permit

Potential members’ services to PAA

current services

Trade Financing

HS Code Classification

FTA Analyzer eCO Issuance Credit Insurance

Marine Insurance

Shipping Documents

Export Declaration

Import Procedures

Export Procedures

RFQ

Freight Mgnt

eMarketPlace

eBL /eNegotiatioin Payment

Challenges &

Recommendations

Issues and Challenges

Capacity Gaps

among the Parties

National / Private Technical Standards

Different Legal

Framework

Cooperation between Public and Private Sectors

Lack of Coordination

Mechanism

Five major challenges to overcome

Adoption of common international standards into national paperless trade systems and active participation to international standards development

Domestic legal framework in align with international model laws and conventions

More rigorous capacity building program at regional level with reciprocal capacity building activities and support

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

Regional arrangement for the recognition and facilitation of cross-border electronic documents and data

Recommendation