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HOW TO CO-CREATE
E-CUSTOMS INNOVATIONS
FOR TRADE FACILITATION
BETWEEN EUROPE AND
AFRICA
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Prof.Dr. Yao-Hua Tan
Faculty of Technology, Policy, and Management Delft University of Technology
20 pilots on IT innovation for e-Customs and Int. Trade
• Trade lanes Air/Rail/Road/Sea between EU and China, US, Latin-America,
Africa
• E.g. FloraHolland, Procter & Gamble, General Motors, Bosch Siemens
Household (BSH), Airbus, MAERSK, DHL, IBM
• Customs Netherlands, UK, Belgium, Italy, Spain, US-DHS
• World Customs Organization (WCO), Interpol
• European Shippers Council (ESC)
• European Freight Forwarders Association (CLECAT)
•
E-Customs Innovation based on Research: EU Project CORE • 70+ partners
• Duration 2014-2018
• Total budget 49M euro
• funded by the European Commission
CORE Consortium (70+partners, 49M euro)
Public entities & NGO
Supply chain actors
Solution providers
Knowledge institutes, consultants & other
Further Info
• Presentation TEDxBinnenhof:
http://tedxbinnenhof.com/yao-hua-tan-talk/
Research projects funded by the European
Commission:
• CORE (2014-2018, 49M euro)
http://www.coreproject.eu/
• CASSANDRA (2010-2014, 22M euro)
http://www.cassandra-project.eu/
• ITAIDE (2006-2010, 12M euro)
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Key issues in International Supply Chains
• 40% of Delay time of international supply chains at large
Mainports is caused by administrative burdens; e.g.
• Paper documents
• Uncoordinated Inspections at the border of
• Customs & Tax (VAT, Excise etc.)
• Food- and Product safety
• Anti-terrorism etc.
• Reducing Supply chain barriers to trade could increase
average GDP by 5% and trade by 15% (OECD reports)
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E-Customs innovations for Trade Facilitation Strategic Trade Facilitation Objectives (WCO, WTO etc):
• Single Window
• One time provisioning of business data to all government agencies
• Via on-line portal provided by the national government
• Coordinated Border Management: integrate Customs controls with
other inspection agencies
• Security
• Safety (Food, Product)
• Indirect Taxes (e.g. VAT, Excise)
• System-Based Control (vs. Transaction-Based Control)
• Check internal (ICT-) controls of companies rather than physical
inspection of goods/containers
• Trusted Trader Certificates (e.g. AEO, C-TPAT etc.)
Prof. Dr. Yao-Hua Tan 6
CORE FloraHolland Demo Import of Flowers into the Netherlands from Kenia • Most of the roses on the EU market are grown in Kenia and Ethiopia
• Shipped by FloraHolland from Kenia to the Netherlands
• 90 tons/year, 2 flight/day
• Distributed form Netherlands to all over Europe
• Now 100% shipped as air cargo
• By 2020 estimated 70% air cargo, 30% reefer containers via sea
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CORE FloraHolland Demo (2) Coordinated Border Mgt: Two inspections at the EU border • Customs: duties, security, narcotics
• Phyto-Sanitary Inspection: flower/plants diseases (e.g. bugs, fungus)
1. Different Risk Analysis models • risk parameter data element ‘roses stem length’
• Crucial for import value, hence in customs risk model
• Not in phyto-sanitary risk model
• risk parameter data element ‘rose species type’
• Crucial for disease sensitiveness, hence in Phyto-sanitary risk
model
• Not in customs risk model
2. Different inspection procedures (EU regulation!) • Customs inspection must be done at the border (DG-TAXUD)
• Phyto-sanitary inspection is allowed after passing the border at the
site of the importer (DG-SANCO)
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CORE FloraHolland Demo (3)
Customs
Flower Inspection
Agency
Freight Forwarders
Customs
Flower Inspection
Agency
Freight Forwarders
Kenya The Netherlands
3. National and International Alignment between Coordinated Border Management actors is essential
FloraHolland Air Demo (current)
Customs (Import) Fiscal
Import declaration + (ENS(?))
RISK ASSESSMENT
OK: Customs clearance
Goods free for pick-up from FloraHolland Warehouse
Customs inspection
Phyto-sanitary (NVWA)
RANDOM SELECTION
Ok
Phyto-sanitary certificate (paper document)
Phyto-sanitary inspection
Import declaration
Phyto-sanitary declaration
Customs (Entry) Security
ENS RISK ASSESSMENT
Ok Customs inspection (security)
SEQUENTIAL Delays:
Average +2 hours Worst +2 days
IN THE AIR/ AT SEA
ON LAND
FloraHolland Air Demo (improved)
Phyto-sanitary (NVWA)
RANDOM SELECTION
Customs (Import) Fiscal
Ok
e-Phyto-sanitary certificate
RISK ASSESSMENT
OK: Customs clearance
Goods free for pick-up from the Customer
Phyto-sanitary inspection
e-Phyto-sanitary declaration
Import declaration
Customs (Entry) Security
ENS RISK ASSESSMENT
Ok Customs inspection (security)
IN THE AIR/ AT SEA
ON LAND
+ “goods description” : Pro-forma invoice
PARALLEL In the Air
95% of the goods are free for
planning onwards transport before
the plane arriveslands/ ship
arrives
e-Phyto-sanitary certificate
Import declaration + ENS Optional Multiple Filing: + “exporter” :e-Phyto-sanitary certificate
• New EU Customs Code (UCC)
allows ‘Pre-Notification’
• Int. Plant Protection Council (IPPC) probably introduces electronic e-Phyto certificate
FloraHolland Sea Demo • Reefer Containers are cheaper
• From Port of Mombassa to Port of Antwerp
• 5 container shipments already tested in spring 2016
• Potential 30% of 90 tons flower export via reefer containers
instead of air cargo
• 50% reduction of transport costs
• But more complex coordinated border controls • More inspection agencies and processes involved
• Increased business risk of extra delays!
• First EU Port of Call Algeciras or Felixstowe
• Entry summary declaration (ENS) risk assessed by Spanish
Customs or UK Customs
• Possible ENS related scan/inspection at final port Antwerp done
by Belgian Customs (very efficiently done in pilot!)
• Under customs and phyto-sanitary transit procedures to
FloraHolland warehouse in the Netherlands
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IT Innovations for Trade Facilitation • Give the government inspectorates access to company data,
by facilitating public-private information exchange
• Government Single Window initiatives
• e.g. Digipoort (NL), TradeXchange (Singapore)
• CORE ‘Customs Dashboard’ for ‘ENS Multiple Filing’ in UCC
• Phyto Sanitary Electronic Declaration systems
• E.g. CLIENT (NL), KEPHIS (Kenia)
• Port Community Systems
• e.g. Portbase (Haven Rotterdam), Cargonaut (Schiphol airport),
PortNet (Singapore), e-Port (China), MCP (UK), DBH (Bremen),
Dakosy (Hamburg), Portic (Barcelona)
• Supply Chain Management software providers
• e.g. Descartes, GT-Nexus, SAP, IBM etc
• ICT Technologies:
• Cloud Computing
• Web Services, Service-Oriented Architecture
• (Big) Data Analytics 13
Data Pipeline (David Hesketh, Frank Heijmann)
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Consignor or Exporter
Consignee or Importer
Container/Carrier
Freight Forwarder
or 3PL
Freight Forwarder
or 3PL
EU
Regulation
Country B
Port 1
Port 2
CARGO
3rd Country
Regulation
Country A CARGO CARGO CARGO
Ph
ysic
al
laye
r O
rga
nis
ati
on
al
laye
r D
ata
& D
ocu
me
nt
la
ye
r
CORE: MAERSK/IBM Data Pipeline:
Supply Chain Visibility Platform
(SVP)
SVP Add-ons
SVP
Event receiver
Document store
Event repository
Publish Event
Store Document
Broadcast Events
Get Document
Get Shipment Events List
Subscribe to Event
Webpage
to publish
event
Webpage
showing
shipment
event
Webpage
where you
subscribe
to events
Event is
broad-
casted to
A cloud based solution like Dropbox, oneDrive etc.
Document is retrieved by clicking on the URI in the event
Document is stored manually
Component list • Event receiver • Event repository • 4 Web services • 1 Cloud base doc store • 3 Web pages • Ability to distribute events to e-mails
CORE Large Scale Demo
• Large volume tradelanes: piloting with 1000+ containers • Supply Chain Visibility Platform, Container Security Devices
• Kenia-Netherlands/Belgium
• Flowers
• EU-US
• Automotive, Electronics, Fruit and Vegetables
• Key partners • Dept. of Homeland Security/US Customs and Border Protection
• Dutch Customs
• Belgian Customs
• UK Customs
• European Commission (DG-Taxation & Customs)
• Trademark East Africa
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http://www.rsm.nl/customs
Three Pillar Approach
Benefits for Business
• System-Based Control: better information exchange and re-use of source data and internal controls
• Harmonization of procedures • Solution for Coordinated Border Management
• Does not mean that all government agencies must use the same
procedures: harmonize procedures does not require
standardization of procedures
• Reduction of administrative burden for companies • 40% of Delay time of international supply chains could be
significantly reduced
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Benefits for Government • System-based Control
• The more a company is ‘in control’ in all aspects, …
• the more a government regulator can focus on meta-control
i.e. controlling the way internal controls are being managed
• Integrated risk management, IT audits, tec.
• Trusted Trader certificates: Authorized Economic Operator (AEO)
• More efficient use of government professionals • Separate 80% ‘Green lane’ and 20% ‘Red lane’ inspection at the
borders
• More empowerment for government professional • Meta-control instead of physical inspections
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