Commentary: SL to Advance Cross Border Trading through NSW, Trade Information Portal
12 June 2018
In this commentary, Mr. Bandula Dissanayake, Secretary General, National Chamber of Commerce of Sri Lanka, notes initiatives being planned by the Government of Sri Lanka to improve 'Trading Across Borders,' a Doing Business Index, in the country. The National Single Window will offer a single point for submission of standardized information and documents to facilitate Sri Lanka's imports and exports. The Trade Information Portal, a complementary project, would help generate trade and investment.
SL to Advance Cross Border Trading through NSW, Trade Information Portal
By Mr. Bandula Dissanayake
Simplification of trade procedures and documentation, harmonization of the trade practices and rules, transparent information and procedures of international flows, recourse to new technologies to promote international trade and more secured means of payment for international commerce could be identified as trade facilitation. Asia Pacific Economic Cooperation defines trade facilitation as simplification and rationalization of customs and other administrative procedures that hinder, delay or increase the cost of moving goods across international borders. In simple terms, it can be recognized as, making it simpler and efficient for traders to move their goods across borders. Doing Business Index compiled by World Bank is also taking ‘Trading Across Borders’ as a significant evaluation criterion in ranking countries. Under this category, time to export with regard to documentation and border compliance, cost of exports in compliance with documentation and border procedures, importation time and cost related to border procedures and documentation are taken for detailed evaluation. This confirms the importance of cross border trading at every level.
National Single Window (NSW)
The National Single Window comes in to picture, in providing above mentioned facilities in a very methodical efficient method. National Single Window, for foreign trade is a facility created using Information Technology and telecommunication platforms, initiated by a government to facilitate import, export and transit bureaucracies, by offering a single point for the submission of standardized information and documents, in order to fulfill official demands and facilitate logistics. It handles all public and private administrative procedures in foreign trade. This single submission may be lodged through single window for reuse across a range of government agencies, by trader organizations and even by individuals. The basic principles of single window are built on this single submission of data; hence, it may be reused by the system wherever required without additional data entry. Further, single window attributes include a single point of payment, improved business processes in government agencies, and speedier turn-around for approvals and decisions. It gives opportunity for traders and their agents to connect up with ministries of trade, agriculture, health, food security, and finance and so on to electronically lodge license applications and customs declarations. It is a known fact that the information technology advancement and innovation has given great benefits to international trade development. Automated Custom clearances, Port operations, import and export authority requirements were able to complete much more effectively than before. In an increasingly globalized environment many economies needed a much more effective system than that automated customs operations from the 1980s namely, Asycuda. Many Single Windows were implemented in the world and doing business index, for the first time in the year 2017, went up to the extent of measuring effectiveness of the single window systems, through Trading Across Borders. It is considered as a system that receives trade related information and disseminates to the government authorities and many private sector stake holders and individuals.
Sri Lanka on the move
By 31 May 2016, the Sri Lankan government ratified the WTO Trade Facilitation Agreement where it came to effect in February 2017. Additionally, Sri Lankan government requested, the support of World Bank Group, in order to proceed with trade facilitation through a National Trade Facilitation Committee and for the implementation of Web based Trade Information Portal, and to implement National Single Window operation. By now with the technical assistance of the World Bank, the Project Management team Sri Lanka is working through, identified eight task clusters namely; 1. Legal and regulatory framework 2. Governance and operational model 3. Revenue and fee structure 4. Technical and functional specification architecture 5. Service level agreements for agencies in the NSW 6. Business process re-engineering and change management 7. Risk management strategy and 8. Implementation capacity building for operators and participating agencies and traders/users. Further, the project management team has identified key attributes of the National Single Window to be implemented. Submission of Cusdecs and notifications in a paperless customs, handling shipments, taking various approvals of authorities, payment of duties and charges, single submission, information/help desk, managing bonded warehouses, use of international standards, risk management and establishment of KPIs could be categorized as some of them. Sri Lanka Customs would be the lead agency on National Single Window and initially key institutions such as Department of Export and Import Control and Sri Lanka Ports Authority will be integrated in to the system and many other cross border related agencies would be expected to join the system with the view of providing best ever services to importers and exporters in time to come.
Issues faced by NSW Sri Lanka
As occurred in many countries, Sri Lanka is also going through challenges in implementing NSW. Fulfilling legal frame work requirements such as complete execution of the Electronic Transactions Act, and introducing necessary amendments to Acts and Ordinances of SL Customs, Dept of Export and Import Control, Telecom regulatory, SL Standards Institution, National Medicine Regulatory Authority, Food Control Administration, National Plant Quarantine Service and Animal Quarantine, are considered to be vital. Operational support, latest technology adoption and sustainability of implemented NSW are also of paramount importance.
Contributing to GDP growth – Examples from other countries
The studies have exposed that cross border trade facilitation through National Single Window will give guaranteed additional growth to GDP. But different economies choose to implement their National Window in varied complexities. For example, Mauritius implemented their single window with a major focus on Customs operations and revenue authority, Port Authority and National Chamber of Commerce of Mauritius only.
The Australian Single Window is connecting up many agencies in the process such as customs authorities, quarantine authorities and meat producers etc. It is a continuous process from the production to export, by providing sanitary inspections and certifications.
The Single Window of Singapore was initiated way back in 1989 and considered to be one of the very first implemented in the world. Today the said system handles more than 30,000 declarations per day and they process 99 percent of permits in just 10 minutes. All the fiscal collections are happening through interbank transactions. The trading community enjoys at least 20 percent to 30 percent cost savings by using the system.
Just like Singapore, Sweden also falls into the category of one of the very first countries to have single implemented the single window. They started with Customs Information System for mainly export facilitation and covered import and transit goods later. Today almost all the customs declarations are done online, though paper based transactions are also allowed. Over 12,000 companies and 7000 citizens are benefitted through this system and it is noteworthy that all the services are provided free of charge.
Republic of Korea and Malaysia
Republic of Korea’s Single Window is considered to be one of the best implemented so far and the immense contribution of the Information and Communication Technology for the project has made it very effective. The initial effort of the project was to provide one stop clearance service with single submission of application. Subsequently, the Korean Customs was connected with all the government agencies using integrated e-document transmission system.
Malaysia is also one of early starters of paperless customs, way back in 1990s. They managed to bring in the Single Window system by end of 2012, which was an expansion of the existing paperless system.
Single Windows moving beyond national boundaries
Association of South East Asian Nations (ASEAN) agreed in the 2003 Summit to implement ASEAN Single Window by integrating National Single Windows of the member nations in order to cooperate and exchange customs electronic data and expedite cargo clearances. It is expected that the cost of trading would go down by 8 percent through this effort. Implementation of ASEAN Single Window is a reasonably challenging situation since each member country is having their own customs regimes and legislations, and many are in the process of ratifying their home front systems. The ASEAN member countries are: Indonesia, Thailand, Malaysia, Singapore, Philippines, Viet Nam, Myanmar, Cambodia, Laos and Brunei Darussalam. Similar Regional efforts are visible in Latin America and Caribbean, as well as Pacific Alliance countries namely Chile, Colombia, Mexico and Peru.
All over the world, the National Single Windows are complex and sophisticated systems connecting up many border agencies both government and private sector. Agriculture authorities will connect up for sanitary inspection and certification matters. In the same manner various industry & trade bodies such as Chambers of Commerce, Department of Commerce and Ministries will also be linked to full fill licensing and certificate of origin requirements. Banks will also be on the loop for financial transactions and shipping lines and carriers will be on the system for bill of lading and other road documents. Essentially there would be Port authority and Border authorities too in the system. The customs will be handling E declarations and all other customs procedures.
Trade Information Portal (TIP)
In parallel to the National Single Window, it is expected to implement Trade Information Portal in Sri Lanka which would help generate trade and investment in the country.
The trade portal is a web-based portal system, and it will make all cross-border trade regulatory information available at a stroke of a key. The information includes all laws, prohibitions, restrictions, technical standards, the entire commodity classification and tariffs, all procedures for license and permit application and clearance, in plain language instructions. Information pertaining to government ministries & agencies, Customs, Regulatory authorities, Ports Authority and Standards Institution will be included in the TIP. Sri Lanka TIP is expected to be launched in early July.
As per the studies already conducted, Sri Lanka TIP will carry approximately 69 Acts and Circulars, 120 Gazette Notices, 23 Guidelines, 176 Measures, 186 Procedures, 225 forms and 50 information pages. It is noteworthy, that Sri Lanka is having approximately 788 regulatory documents to be uploaded to TIP and it is only second to Viet Nam TIP having 1665 such documents. Countries such as Bangladesh, Lao PDR, Cambodia, Malawi, Lesotho, Botswana and Nepal also implemented their TIPs by now.
The World Bank Group would assist Sri Lanka both Technically and financially in implementing the TIP and Government of Sri Lanka, having Department of Commerce under the Ministry of Industry and Commerce will take primary responsibility of sustainability of the TIP. Cross border trading community, especially private sector would be greatly benefitted by this Trade Information Portal and Department of Commerce is likely to launch the TIP within the month of July 2018, if all goes well.
TIP will help save both time and money, reduce error and improve transparency and transaction times to a great extent. TIP will make easier for traders to comply with regulatory requirements by having access to such regulatory procedures on the portal. Further, it would be a great opening for small and new exporters.
Implementing single window is not an easy task and requires continuous cooperation of various government authorities, political hierarchy and private sector institutions, it is certainly a costly affair at the beginning and it may take several years to be fully-operational, once implemented it would bring down cost of trading but it will increase efficiencies contributing positively to the growth of the economy. Furthermore, with the usage of top of the range information technology, it would become a proven mechanism of eliminating fraud and malpractices in cross border transactions.
References: UNCTAD Information, World Bank Doing Business 2017, ITC information, NTFC briefings