Singapore's Trade Journey

Singapore’s Trade Journey

Workshop ontheSingle Window Modality andE-tradeandTheirRoleIn PromotingIntra-OICTrade

Casablanca,KingdomofMorocco,9-10November2015

Jonathan Koh Senior Director, Trade Facilitation Centre of Excellence CrimsonLogic Pte Ltd

All rights reserved. ‘CrimsonLogic’ and the Shell Device are trade marks of CrimsonLogic Pte Ltd. All information contained in this presentation is disclosed to you on the basis of a prospective business relationship and is proprietary to CrimsonLogic Pte Ltd and may not be used, disclosed or reproduced without the prior written consent of CrimsonLogic.

CrimsonLogic is a trusted partner to governments worldwide.

We help governments design and run innovative and sustainable services to collaborate more seamlessly with their citizens and ecosystem.

We work closely with our customers to continuously enhance the e-services, to drive adoption and usage of the e-services.

Shareholders

International Enterprise Singapore (A Statutory Board of Ministry of Trade & Industry, Singapore)

PSA International

Civil Aviation Authority of Singapore

Singapore Telecoms (SingTel)

Since 1988, CrimsonLogic has successfully delivered trade facilitation solutions to more than 18 countries.

We offer a comprehensive range of trade facilitation solutions, from designing and building systems that provide a high degree of agility, to operating these systems.

Our international track: record and commitment to quality provide customers with the assurance of on-track: project delivery and achievement of key operation objectives.

CrimsonLogic Trade Facilitation Solutions

Port Single Customs Free Trade Community Window Mgt Zone System System System System

Subject Matter Expertise & Thought Leadership

Execution Excellence

Canada Mongolia

China USA Tajikistan Greece Qatar Oman Bangladesh Mexico Saudi Arabia Jamaica Vietnam India Panama Trinidad and Ivory Ghana Brunei Tobago Sri Lanka Coast Kenya Singapore

Peru Madagascar Papua New Guinea Mozambique Brazil Mauritius

Chile

Typeandnumberofprojectsdone

Single Window Customs Management Port Community Free Trade Zone Consultancy ASP Services System System System System

Country Project Year Business Model 1 Singapore TradeNet® / TradeXchange 1989 PPP 2 Mauritius Mauritius TradeNet 1994 PPP 3 Ghana Ghana Community Network 2002 PPP 4 Saudi Arabia SaudiEDI 2002 PPP 5 Panama Panama Canal Authority 2004 Self Funded 6 Colon Free Trade Zone 2008 Self Funded 7 Panama Customs 2009 IDB Funded 8 Panama Single Window 2013 IDB Funded 9 Madagascar Madagascar (GASYNET) 2007 PPP 10 India Port Community System 2007 Self Funded 11 Ivory Coast Ivory Coast TradeNet 2008 PPP 12 Qatar Qatar Customs Clearance Single Window 2008 Self Funded 13 Trinidad & Tobago Trinidad & Tobago Single Electronic Window 2010 Self Funded 14 Mozambique Mozambique TradeNet 2010 PPP 15 Chile Chile Single Window 2012 IDB Funded 16 Brunei Brunei National Single Window 2012 Self Funded 17 Kenya Kenya Electronic Single Window 2012 Self Funded 18 UAE UAE Circulars and Permits 2012 Self Funded 19 Oman Integrated Customs Management System & Single 2013 Self Funded Electronic Window

Challenges

Security & Border Economy and Trade Protection Competitiveness

Strategy

Trade Facilitation

Integrate Customs, Port And Promote convenient services, Trade licensing information information sharing and services to establish National interoperability to enhance Single Window. the trade competitiveness.

Enabling Strategies Value Drivers Fundamental strategies 1. Disengage payment process from physical transaction Clearance 2. Enable and encourage electronic information input and submission speed 3. Develop public-private partnership models with trading community 4. Integrate internal governance process across relevant departments 5. Enhance collaborative teaming

Cost of Leading Practices trade 1. Adopt a risk management-based compliance approach 2. Implement preclearance and pre-certification programs 3. Integrate revenue collection into payment reconciliation processes 4. Implement strategic targeting programs 5. Exploit new technologies to streamline clearance procedures Security & 6. Integrated service delivery/whole of government compliance Emerging trends 1. Adopt virtual border preclearance activities 2. Adopt standardized international payment methods 3. Consolidate and apply all available data to improve interdiction Productivity 4. Develop business partner capabilities with key industries 5. Develop new/expand international partnerships 6. Develop public-private information sharing mechanism

• Economy has grown substantially since independence • GDP per capita jumped by almost 100 times from US$512 in 1965 to US$55,000 in 2013 • Singapore was ranked by the World Economic Forum among the top competitive economies in the world.

Along the way, Singapore’s Economy Suffered Severe Recessions, e.g. 1985. An Economic Committee established to set new directions for the Singapore economy reviewed the reasons for the recession and recommended measures to cut costs, build up Singapore's international competitiveness, alongside longer-term issues like wage flexibility. The economic recovery came in 1986.

“Opportunities arise in times of crisis. Singapore’s experience in establishing our single window initiative is a testimony to this statement. In 1985, Singapore was hit by a recession.A high-level Economic Committee convened at that time identified improvement in external trade as a major goal and highlighted that use of IT could make a significant contribution to Singapore’s long term competitive position. This report was an important mobilizing factor to the realisation of Singapore’s single window, which was implemented in 1989 under the name of TradeNet. This was the world’s first nationwide electronic single window.

After twenty years and many rounds of relentless upgrades, TradeNet remains the key enabler of Singapore’s external trade, which totals nearly 4 times our gross domestic product.”

- Extract fro Speech by Mrs Lim Hwee Hua, Minister, Prime Minister’s Office, Second Minister For Finance And Transport APEC Customs – Business Dialogue, 2009

CrimsonLogicCrimsonLogic CopyrightCopyright 2014 2014 (Private) 16 HOW WE STARTED In the mid 80s • Singapore was among the top 20 trading nations in the world • Multiple parties involved – traders, shipping lines, freight forwarders, shipping agents etc. • Required multiple agencies’ endorsement – Trade Development Board, Customs and over 35 Controlling Units • About 10,000 declarations daily in 1987 • 4-20 documents had to be completed for each import/export • All handled MANUALLY

• Government response - establishment of a high- powered Economic Committee to review the weakness of the Singapore economy and to chart new strategies to improve its economic competitiveness.

• One of the recommendations was to expedite the use of IT to improve trade competitiveness. In 1986, Hong Kong, revealed that it was creating a trade system (TradeLink), which strengthened Singapore’s resolve to implement our own TradeNet®.

• The Trade Development Board was given the task of mobilizing the trade community and became the coordinating point among various agencies such as Customs and Excise, Port of Singapore Authority, and Civil Aviation Authority of Singapore.

TradeNet Steering Committee

Sea Community Air Community Government Sub-Committee Sub-Committee Sub-committee

Implementation Team

Integrated Procedures & Business Processes Proposal

Dec 1986  Formed Executive Committee led by Trade Development Board (TDB)  Formed Project Committee led by National Computerisation Board (NCB) Feb 1987  Established 3 Working Groups for the sea, air and government sectors Mar 1988  Completed Technical Design Specifications  Incorporated PPP Vehicle – SNS (now CrimsonLogic)  Initiated Public Education Program Oct 1988  Pilot/test run of TradeNet Jan 1989  TradeNet went “Live”

Since 1989 - World’s first nationwide trade clearance system

• Integrates 35 controlling units’ requirements • > 8000+ business rules • >12,000 users • 9,000,000 trade declarations • over 90% processed in < 10 minutes

Controlling Agencies Ministry of Health Ministry of Manpower National Environmental Agency Singapore Civil Defense Force Agri-food & Veterinary Authority Singapore Police Force Singapore Customs (CWC) Central Narcotics Bureau Health Sciences Authority InfoComm Development Authority

International Enterprise Singapore Media Development Authority

World’s first nationwide trade documentation system Single point for trade-related transactions with the Government Integrates all 34 controlling units’ requirements 100% of the total Trade transaction are processed by the TradeNet® system. Handles ~ 9 million transactions per year. Used by approximately 2,500 companies with 8,000 users. The latest TradeNet® Version 4.0 went live in October 2007.

Before TradeNet After TradeNet Processing 2 – 7 days within 10 mins time/permit

Fees charged US$6 – US$13 approx. US$2.10

Number of 4 – 35 docs 1 eForm / eDoc documents Time of Office hours Available 24 hours Submission

Singapore’s Rank: 1st Worldwide

4 Documents to export / import: 1. Bill of Lading 2. Commercial Invoice 3. Customs Export / Import Declaration 4. Packing List

Export Import Export Import Export / Import Procedures Duration Duration US$ Cost US$ Cost days) (days) Documents preparation 1 116 1 99 Customs clearance and technical 1 50 1 50 control Ports and terminal handling 1 150 1 150

Inland transportation and handling 2 140 1 140

Totals 5 456 4 439

(source: WorldBank Doing Business 2013)

1. Connectivity is the Next Step

2. Examples of Regional Interoperability

3. Considerations for INTRA-OIC TRADE

Business value chain TheTrendIsRegional Inter-connectivity

Regional / Global SW

National SW with some/all OGAs Customs Single Trade Window EDI / VAN TradePoint Integration scope Customs System Portals

Customs Trade Trade Limited Nation-wide Nation-to- Automation Information Information B2G Single Window Nation Portals Exchanges B2G / G2G

The 10 ASEAN nations – Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

On the 9th Dec 2005, the Agreement to Establish and Implement the ASEAN Single Window

“ The ASW is the secured environment where National Single Windows (NSWs) integrate and operate. The ASW constitutes a regional facility to enable a seamless, standardized and harmonized routing and communication of trade and customs-related information and data for customs clearance and release from and to NSWs. Trade and related customs data and information will stay within, and belong to respective Member States.”

where;

“The National Single Window is a system which enables: • a single submission of data and information; • a single and synchronous processing of data and information; and • a single decision-making for customs release and clearance.

31 CrimsonLogicCrimsonLogicSource: Official ASEANCopyrightCopyright Website 2014 2014 [www.asean.org/18005.htm] (Private) 31 CONNECTIVITY OPTIONS Virtual Network Bilateral Approach : (Https, IP/VPN) Point-to-Point Leased Line Decentralized System Connectivity Centralized AM AM system/server S 2 S 3 A A A A M M M M AM AM S S S 1 S 4 A 2 3 A A S S A M M M 2 3 M S S S S 1 4 1 4 AM A AM A S M S 5 M 10 S A A S M M 1 S S 5 0 A AM 10 5 A M AM S 6 M S 9 S S A A AM AM A 6 A M 9 M M S 8 S 7 M S S S S 6 A A 8 7 9 M M S S 8 7 A combination of centralization and AM AM S 2 S 3 decentralization whereby sensitive data AM AM S 1 S 4 such as trade data does not go through  Data to be routed from a centralized gateway residing in a central server . A central server may be country to country without AM AM being stored at one place S 10 S 5 required for hosting non-  IPVPN enabled secured data confidential/non-sensitive data such as AM AM S 6 common reference code list, ANTH etc exchange between S 9

AM and some central facility for general countries in a secured AM S 7 S 8 environment enquiry , transaction volume monitoring etc

Evaluation of technical prototype of ASW Pilot Project (Component 3) Development of technical Live ASW prototype for ASW Pilot Implementation Project & pilot Target: 2013 Implementation (Component 1 and 2)

Development of overall security framework for ASW

Development of MOU for ASW Pilot Project

Development of ASEAN Data Model

Business value chain ASEAN Single Window Regional / Global SW

Brunei , Indonesia, National Single Windows Malaysia, Philippines, Singapore, Thailand National SW Vietnam with all OGAs Cambodia Lao PDR Customs Myanmar Single Trade Window EDI / VAN Customs Tradepoint Portals System Integration scope

Customs Start of Start of Limited Nationwide N2N Automation Trade Trade B2G Single Window Era Information Information B2G / G2G Exchanges

35 CrimsonLogicCrimsonLogicSource: UNECE – TenCopyrightCopyright Years 2014 of 2014 Single (Private) Window Implementation (Jonathan Koh Tat Tsen) 35 CHALLENGES

1. Implementation strategy plan needs to take into consideration Member States’ level of readiness in terms of IT infrastructure , national policies and procedures 2. Trust could be lacking and view/recommendation from independent experts tend to be more acceptable by ASEAN Member States 3. Financial constraint remains an issue and implementation of projects is very much dependent on external funding

Economy A Purchase Order, Advance Shipment Notice Economy B Commercial Invoice, Packing List, B/L information, Declarations, Certificate of Origin… etc.

Member Member State State A B n n End User B o o i i

End User A t t a a

t r t r r r a a l o l o c c p p e x e m E D I D

Customs Authority Customs Authority of Economy A of Economy B

(1) Purchase Order Taiwan (1) Purchase Order PAA Network (2) Invoice Sellers (2) Invoice HK Buyer (3) Advance Shipment (3) Advance Shipment Notice Notice

(4) ASN, Invoice XML standard (6) Declaration (5)Declaration

Hong Kong Chinese Taipei Customs Customs

Exchange of data and Exchange of declaration information. information. Declaration For instance in Makasa, Processing For instance in ASW and EACCIS. NCTS.

Data and Transit Information Connectivity Management Sharing

Exchange of Certificate of Exchange of transit Origin. information. Rules of For instance in ASW, Origin For instance in RADDEx, between KR and TW. NCTS, eTIR, and ACTS.

Process Platform

Connectivity Considerations

Policy People and Framework Organization

What data or document to exchange? In ASEAN Single Window (ASW), although a number of documents was considered for cross border exchange, only the Preferential Cert of Origin Form D was put in pilot trials.

How does the connectivity take place? Centralised (Federated) or (Decentralised) Peer-to- Peer?

In ASW, connectivity is between National Single Windows. How will connectivity fit into the existing Facilitate the cross border trade, and leverage ASEAN trade process for traders and for authorities Free Trade Area (AFTA) on all sides? Goals - How will this benefit traders and Reduces cost and time. authorities?

What is the cost, time and process savings? One of the goals is to reduce average time to import to ASEAN to 14 days by 2017 (was 17.5 days in 2013)

To ensure data field type and length are compatible. Recommend to follow standards recommendations from international organizations Data Model like WCO and UNECE.

m To ensure data blocks and document types are in r

o common use for all involved parties. Taking f t Message and Document Standards international and regional document standards into a l account. P

y t i v

i To ensure connectivity protocol is secure t

c enough. Usually using PKI signing and e Secure Connectivity Protocols

n secure transport mechanism. n o C

To ensure implementation feasibility and continuous ICT Infrastructure Implementation operation.

Considerations

How to ensure connectivity is in line ASEAN member states agreed to develop an ASW Legal with the law among the parties of Framework Agreement (LFA) the exchange? A Working Group on legal and regulatory matters was formed that reports to the ASW Steering Committee.

One of the goals is to identify the legal framework gap in ASW vs each NSW.

What is the legal framework of Example : cross-border connectivity? PAA Legal Framework

Inter-operabilty Security – Mutual PKI Recognition

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All rights reserved. ‘CrimsonLogic’ and the Shell Device are trade marks of CrimsonLogicPte Ltd. All information contained in this presentation is disclosed to you on the basis of a prospective business relationship and is proprietary to CrimsonLogic Pte Ltd and may not be used, disclosed or reproduced without the prior written consent of CrimsonLogic.