Workshop on “Trade Facilitation

May 6th 2014”

“BPA SURVEYS”Presentation: Mr. Nikolaos Archontis,

Chief Operations Officer Panhellenic Exporters Association,

The choice of products was based on statistics and studies by Greek and foreign authorities and organization for dynamic sectors of exports and internationalization prospects of Greek products.

The key element was to cover as many of these sectors, through key products of each sector.

Following the kick off event, held in Sep 2013, with the participation of sectoral organizations, we concluded to a generic approach of canned peaches, virgin olive oil, cosmetics, aluminum products and dual use products of iron and steel.

We also recorded the suggestions of the stakeholders on target-markets and ways of transportation

BPAs : Choice of products

13.18714.990

17.292

19.391

21.320

17.584

21.083

24.353

27.613

0

5.000

10.000

15.000

20.000

25.000

30.000

2004 2005 2006 2007 2008 2009 2010 2011 2012

YEAR

GREEK EXPORTS 2004-2012

TOTAL EXPORTS (mil EUROS)

Not all of the stakeholders fully identified with the need of BPA surveys on their sector, or were fully committed to their active participation in such a survey.

On BPAs to follow we should ensure a ministerial mandate to raise awareness about the scope of those BPAs and their use to support international trade of Greece and benchmark reforms

The example of the canned peaches was a useful guide in that direction.

In any case for the steps to follow we should ensure more active participation of the stakeholders in that matter.

BPAs: The resisting minority

Another challenge that we are still facing with the BPAs is the lack of a single “in-house” contact point in the businesses that participate in our survey.

Most of them are using brokers for their customs procedures that are not “in-house” or the Exports Department has not full knowledge of the payments procedures, export credit insurance etc.

Furthermore, the products of choice are being exported to the correspondent target-markets by a surprising limited number of companies that are not covering to limit of 10 enterprises of the UNECE methodology.

Eg. Only 4 companies export olive oil to USA.

BPAs: A big happy family

After our first meeting with Dr. Lehr, we have suggested that we should increase the number of participants-stakeholders, including all those identified for our workshops (Exporters, Business Associations, Bank, ECIO, Ministerial Authorities, Brokers etc.)

In this context, we believe that we will have a broader picture of the procedures and the processed followed by the Exports, in terms of real economy, legal framework, routine or out-sourced dependencies.

In some cases, what Exporters thought it was a standard procedure was far from real and out-dated in terms of the Road Map

BPAs: Let there be light…

P R O M Y T H E U S

The truth is we all have big expectations from the BPAs. Much like the “hot air balloon story”:A man in a hot air balloon is lost. He sees a man on the ground and reduces height to speak to him.-"Excuse me, can you tell me where I am?"-"You're in a hot air balloon hovering 10 meters above this field," comes the reply.-"You must be a researcher “, said the balloonist.-"I do," says the man, "How did you know?"-"Well," says the balloonist, "Everything you told me is technically correct, but it's no use to anyone."-"You must be in business," says the man.-"I am," says the balloonist, "How did you know?"

-"Well," says the man, "You don't know where you are, you don't know where you're going, but you expect me to be able to help. You're in the same position you were before we met, but now it's my fault."

BPAs: …with even bigger expectations

BUY phase:1. Starting Up: It takes 1-2 days to register to the General Electronic Commercial Registry

(G.E.MI.). Cost 10,12 euros-Challenges: There is no way to know if a company exports or not. Still the employees of the

Chambers of Commerce validate the data entries (not fully automated procedure)2. Trade Agreement: It takes 1 week to 1 month to conclude the agreement. Cost: 30-40 euros for

communication and documents exchange. Most common agreements: Cost & Freight (CFR) or EX-WORKS (EXW).

-Challenges: Euro-dollar rates + high import tariffs (16% FoB). Potential improvement through the Transatlantic Trade & Investment Partnership.

BPA: Canned Peaches shipped to USA

SHIP phase (Certificates and Going to Customs):1. Preparing the order and organizing transport of the container: 7 days. Cost 350-500 euros.-Challenges: The shipping companies has full control over the procedure2. Health & Quality Controls, Clearance and Transportation to Custom of Exit: 1 day. Costs 10 euros minimum per load

for quality inspections (or 1 euro/ton if above 1 ton), 9,78 euros per hour for the inspectors, 0,15 euros/klm inspectors compensation for going to inspections. Average cost 120-140 euros.

-Challenges: High Cost (1 Exporter estimated to 20.000 euros annually for the inspections), while the certificate is not required by the buyers. No legal framework for private sector labs. No legal framework for Exporters responsibility. Fees paid not returning to the Inspection Authorities. AEO and Simplified Procedures not applied by the Exporters. If Veroia Customs will close it will cause further delays. Too much samples needed for the Chemical Analysis Documents (4 in each load). Delays on T2 document for sugar imports.

3. Buyers Requirements/ FDA terms: 15-1 hour for submitting and receiving certificate. Up to 1 month if samples are needed to be inspected. Cost 150 euros if samples are being inspected.

BPA: Canned Peaches shipped to USA

SHIP phase (EXITING CUSTOMS):4. Customs Procedures: Load in Customs: up to 12 hours. Loading on board 30’. Cost 220-240 euros + 10 euros for

sending (courier service) Bill of Landing to the Exporter-Challenges: Shortage of man power. Delays caused by drivers and vehicles controls by the Port Authority. No

screening infrastructure in the Port. No Temporary Storage Infrastructure. The Freighters DO NOT send IE 547 message, so the procedure is done manually. Shipping companies submit BoL and Cargo Manifest after 7-10 days causing delays to the confirmation of EXIT and thus leading to higher guarantees etc. NO interoperability in the OS of Port Authority and Customs for verifying IE 590. NO FREE TRADE ZONES. Submitting documents electronically is not common and the Customs thinks there should be a link between the Servers of Brokers Associations and the ICISnet. NO ICISnet and TAXISnet interoperability for IE 599 messages so that VAT returns could speed up.

5. Shipping to USA: 25-30 days. Cost 1.200 euros

BPA: Canned Peaches shipped to USA

PAY phase:1. Down payment or Letter of Credit: Within 48 hours. Cost depends on the Bank.2. Full payment. Within 45-60 days. Cost depends on the Bank-Challenges: Euro-dollar rates. Intermediary banks for transactions with Greek Banks increase the costs of

transactions.2. Export Credit Insurance: 3-7 days. Cost ranging from 0,22% to 0,40% of loads value.Challenges: High cost for unique loads (0,80%) vs global contracts. NO available credit limit for some

“popular” buyers in the US. Real insurance coverage never exceeds 82%. Often delays for compensations + cost of lawyers abroad burdening the exporters.

BPA: Canned Peaches shipped to USA

TOTAL COST TO EXPORT 20 TONS OF CANNED PEACHES TO THE USA: 2.000 EUROS (11% of the total commercial value of the load)TIME NEEDED TO EXPORT 20 TONS OF CANNED PEACHES TO THE USA (from Day 1): 30 DAYS.TIME TO BE PAID IN FULL FOR EXPORTING 20 TONS OF CANNED PEACHES TO THE USA : 45-60 DAYS.

Moving forward