“Single Window is defined as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements”
UN/CEFACT RECOMMENDATION No. 33
"Creating a port community system - a “local Single Window” in the Odessa region - will be very beneficial for the business community and for the regulatory authorities. It will have a positive impact on the development of Odessa as a hub in the European logistics network between North and South and between Europe and Asia. Establishing a port community system in the Odessa Region may become a first step towards building a national Single Window with all the positive implications on limiting bureaucracy, corruption and integration with Europe in terms of international supply chains. The establishment of a country-wide system would give impetus to the development of an enabling legal environment, and a harmonization of data exchange between different agencies, based on international standards."
Mario Apostolov, Regional Adviser, UNECE Trade
— What is your opinion as UNECE’s Regional Adviser on the implementation of the Single Window concept in Ukraine? Would you, please, provide your comments?
— A few years ago we discussed with various departments and agencies in Ukraine, how to cooperate on implementing trade facilitation measures as an important factor for the country's integration into the European and world markets. Our partners were attracted by the concept of a Single Window for export and import clearance as an advanced tool to facilitate trade. We informed them about the recommendations and standards of the UN Economic Commission for Europe (UNECE) and the UN Centre for Trade Facilitation and Electronic Business (UN/CEFACT), and about the experience in this area of different countries and other organizations: the World Customs Organization (WCO), the International Standardization Organization (ISO), and the European Union. Submitting all information required to carry out a trade transaction only once, to one agency, in a standard format, is the ultimate goal of trade facilitation, but also the definition of a Single Window. During a discussion two years ago, we agreed that a Single Window on the national level for Ukraine would be too difficult a goal on the initial stage. Therefore, we came up with the idea that you can start with a port community system in the Odessa region. Thus we started the project to implement the concept at the level of the port community in Odessa.
Some important steps have already been made. The business community has clearly requested the establishment of such a system, which will eliminate part of the bureaucratic burden. Several levels of management in Ukraine (of the business community, the Odessa Sea Port, the Customs Service of Ukraine, and the Prime Minister's office) have made their decision on the purpose and usefulness of the project. A significant number of stakeholders established an Inter-agency working group to support the project on the central level. A company named PPL33-35 was established in Odessa to implement the project through public-private partnership. The port authorities have already started developing the technical solution for the information exchange system.
Thus, the foundation of the local system has been laid. Nevertheless, the individual elements are to be combined in a single vision. A single Master Plan should be agreed between all stakeholders and approved at the highest political level. The purpose of such a Master Plan would be to distribute the roles and responsibilities of each of the parties involved. There are tasks that the port community can lead to a successful end through their own efforts: for example, the creation of the computer structure on the local level. However, the creation of an enabling legal environment (e.g. the establishment of legal equality between paper and electronic documents) or data harmonization between different documents, sectors and organizations will most likely be dealt with at the national level.
— As a recognized expert in trade facilitation, you actively participate in the implementation of the recommendations of the two international seminars on the Single Window that took place in 2011 and 2012, in Odessa. How would you evaluate the level of implementation of these recommendations at this point?
At the two seminars, which UNECE organized in Odessa with the support of the Government of Ukraine and the participation of PLASKE JSC, we insisted on three elements that were included in the final recommendations. First, the Single Window (respectively the Port Community System in the Odessa Region) should be established in compliance with and inscribed in the country's development strategy. Second, the system should be established step-by-step. Third, the system should be based on international standards for the exchange of trade data and documents. The idea is to use the recommendations, standards, guidelines and other tools of UNECE, WCO, ISO, the European Port Community Systems Association (EPSCA), and other organizations, when building and managing Single Window and Port Community System projects. Electronic data and document exchange should be based on established international standards.
The Single Window is primarily an organizational and political instrument to facilitate trade. Three quarters of the efforts and resources for the preparation, implementation and operation of the system go to organizing cooperation among stakeholders with different institutional and personal interests. Ukraine does not make an exception in this sense. The process of creating such a system needs a mechanism for the production of a public good. The system, as the end product, will eliminate part of the bureaucratic burden, and all participants, actually the whole society, will benefit from this.
One must clearly define from the outset the vision of what the port community system will provide, e.g. more efficient procedures that will speed up foreign trade flows; significant savings of time, human and financial resources on the part of the business community and State control bodies; as well as raising transparency and eliminating the objective preconditions for corruption. It will also serve as a pilot experiment for the possible future introduction of the Single Window principle at the national level in Ukraine. During the implementation of this pilot project, some common issues for the country would be dealt with: for example, the creation of an enabling legal environment, data harmonization between different sectors and documents, as well as the introduction of electronic Customs declaration (which would incorporate the submission of "supporting" licenses and certificates) in accordance with the international standards and European practice. A specific expression of these changes can be correlated to the ranking of Ukraine on such international indices as the Doing Business index and the Logistics Performance Index (LPI) of the World Bank. The issue of the country's ranking in those indexes recently received a great political and financial importance, notably in the country’s relations with its development partners, which require the improvement of Ukraine’s indices. Various Ukrainian agencies are working urgently on measures to improve these rankings.
In order to implement fully the recommendations you are talking about, it seems necessary at this stage to prepare a Master Plan, which would be adopted by the country's leadership, as the recognition of its long-term commitment, but also as a key project management instrument. It is the interagency working group, which will manage the Master Plan. For this reason, one must clearly confirm the status of the group as the governing body of the project, consisting of representatives of public and private stakeholders, endowed with decision-making power. The Master Plan must define a step-by-step sequence of actions, expected results, deadlines and responsible agencies/persons for the execution of each activity. (1) Recent discussions among the key actors have confirmed that the requirements of all stakeholders should be clearly defined and their mandates should be fixed in the organizational structure of the project’s management. (2) It is necessary to agree and clearly define the vision, model and scope of the port community system. This would require drafting a “concept paper”. What processes the system will cover (export, import, transit, only container trade, or any carriage of goods), what ports (Odessa, Illichivsk, dry port, the Danubian ports Reni and Izmail)? A clear vision and a concept will help in presenting the project and its objectives to high level decision-makers in the country and to prospective sponsors. (3) The joint platform of stakeholders needs further improvement. The status of the already established interagency public-private working group must be approved as a mechanism to manage the project. Further, a network of technical cooperation, notably several technical interdepartmental working groups should be established to address such issues as the legal framework, business process analysis and restructuring, data harmonization, and other issues. A working mechanism for cooperation in Odessa on the level of the port community should be set up. A lead agency for the implementation of the project should be nominated. It seemed that Customs already acted as such a lead agency, but no final approval of its role has yet been made. (4) At the two workshops we spoke about the fundamental role of business processes analysis and simplification. So far, such analysis has not been done. Business processes analysis would mean the identification and elimination of duplicate and redundant data and documentation requirements. On this basis, one can simplify, speed up and cheapen the processes, without hurting the core functions of regulatory authorities in the protection of society. (5) Drafting a feasibility study would be the next step. Such a study would describe the scope of the system, the need for it, possible implementation scenarios, a pilot phase, necessary financial, technical and human resources, a cost-benefit analysis, a data flow diagram (G2G, G2B, and B2G), expected benefits, risks, timelines, and project management strategy. One also needs to study the existing systems – which solution will be more efficient: if the existing systems are replaced by a new integrated system or if they are linked to the system by interfaces. (6) In order to create an enabling legal environment one should analyze the respective laws and regulations, and on this basis prepare recommendations for amendments and additional new legislation. For instance, it is necessary to clarify whether legal equality exists between paper and electronic documents and signatures (if not, propose concrete measures to change the law). One must analyze such legal issues as: access to information and data sharing between agencies (if there are rules that prevent the exchange of information, explore possibilities to change them); an interagency agreement on data interchange and the functioning of the system; delegation of authority to the lead agency; electronic archiving and storing information, etc. A mechanism for the protection of intellectual property rights in the system should be devised. The judicial responsibilities of the parties with respect to the accuracy of the information should be defined. A dispute settlement mechanism should also be established. In this process there may be some non-standard questions, e.g. how to connect interested Moldovan private companies or even government departments to the development of the system and the process of collection and exchange of information for transit to and from Moldova? (7) The simplification, harmonization and standardization of data and documents are key issues that should be dealt with when creating the technical basis of the system. Excessive, repetitive and unnecessary data and document requirements are important impediments, which delay information gathering and the trading operations. Data harmonization requires significant work, and the management group may decide that it should be done in full at the national level. At the level of the local pilot project, one can focus only on the key, priority documents, in order to develop a seamless data and document exchange in the port community system. The key issue of alignment with international standards should be addressed on the stage of data harmonization. (8) The next stage should focus on the Application Architecture Design – the design of the functionalities and services, which will be provided by the system. This document will cover the various subsystems and components of the software solution, describe their interactions and their relationship to key business processes involving public and private participants and users of the system. (9) The alignment to international standards and the interoperability of the system’s components are assured on the stage of the development of the technical architecture, which should be open, based on internationally accepted technical standards and interoperability protocols. (10) The implementation of the project, in the long run, is related to the implementation of the business and management models (including a financial plan), defined in the very beginning of the project cycle. A proper mechanism of managing, monitoring and auditing the relevant trust fund should be established (this function can be performed by a joint stock company). The status of a "constituent Member or sponsor", the principles of distribution of the revenue generated through the operation of the system, and the legal foundations of this Public-Private Partnership should be defined in a transparent manner. (11) Finally, one must define in the Master Plan the organization of the operating system deployment and management. The creation of the technical system has already started in the port. At this final stage, attention should be paid to: the specific step-by-step commissioning of the system; the development and application of change management and risk management plans (for example, to address the risk of a departure of one or more key stakeholders); the establishment of an information exchange security system; a risk management system combining the systems of several control agencies; development of the IT infrastructure; and the implementation of the relevant software solutions. Trainings for operators and users of the system should also be planned.
In the process of preparing and implementing the Master Plan and, notably, during its analytical part, we are ready, as a participant in the project and the Working Group, to continue to provide technical assistance. We will render assistance in applying UNECE and UN/CEFACT recommendations and standards, such as Recommendation 33 on the Single Window concept; Recommendation 34 on data harmonization; Recommendation 35 on the establishment of an enabling legal environment, the standards for information exchange, as well as guidance on how to use them. It is very important to cooperate with other organizations working on data exchange standards, such as WCO, ISO, sectorial business associations, such as the European Port Community System Association (EPCSA), FIATA, etc.
— You have repeatedly pointed out the importance of political will to implement the Single Window concept. How would you estimate the level of this political will in Ukraine? Is it high enough to bring the implementation of the Single Window concept to a successful conclusion?
— The political will in support of the project has already been expressed, but it has not yet been clearly established, so as to guarantee the sustainable development of the project. This can be achieved through the adoption of a Government decree or the approval by the Government of a Master Plan, which would define the roles and tasks of the various stakeholders. The representatives of various stakeholder organizations and the private sector in the interagency working group should be fully accredited, with the power to make decisions. This would be an expression of the political will to carry out the project. Ukrainian ministries and their international development partners are working now on improving the country's ranking in the Doing Business index, and this may provide an additional impetus to strengthen the political will, which you talk about.
— What do you think are the prospects of using a mechanism of public-private partnership to implement the Single Window principle?
— From the very beginning the idea of building the system through public-private partnership was at the foundation of this project. Such a partnership can boost the real interest in introducing and providing seed money to kick off the project. The business model, based on the idea of later recovery of initial investments, can be built on the public-private partnership principle. Certainly, the structure (e.g. a joint company in the port of Odessa), which would provide information services for the port community, must be absolutely neutral. It must be independent from the interests of individual institutions or companies, including those that have provided support for its establishment on the initial stage. We must not forget that this system is essentially a public good, which will increase the effectiveness of foreign trade operations, spare society the waste of precious resources that go down the drain of useless red tape. The system should build on the combination of the resources of various stakeholders. Otherwise, its establishment would be much more difficult or even impossible. Already at this stage, one should address in an appropriate study the issue of establishing the legal basis of this public-private partnership.
— What are your assessment and comments on the implementation of the pilot project in the Southern Customs and the ports of Odessa region, which aims at establishing a local Single Window?
— My sincere wish is that all participants in the project maintain their desire to bring it to a successful end. Just think about it. The introduction of such a tool for greater efficiency in international trade and good governance - particularly in Odessa, for the first time not only in the Black Sea Region, but also in the countries with economies in transition - would be a symbolic step, an example for others to follow.
The challenges, however, remain substantial. I would like to give two specific examples. Recently, the port community agency in Odessa conducted an experiment on the clearance of containers using an electronic order (e-naryad) as a document considered to be a key component in the future port community system. Companies participating in the experiment had to do the job twice: fill in the information in an electronic form once and in a paper format a second time, as the existing legal framework requires filing “originals” of documents with signatures of the regulatory authorities on paper. Who and how should analyze the laws and regulations, and then modify them, in order to create legal equality for the electronically submitted information and eliminate paper filing requirements? The second example refers to the interruption of the information flows regarding the movement of goods during their transfer from railway to ferry services in the ports. Armenian Railways have reported that they receive information from Ukrainian railways on tracking goods transiting Ukraine by railway with final destination Armenia. However, when the goods are loaded onto the ferry in Ilyichevsk, the information about them "disappears". In practice, this means that there is no connection between the information exchange systems of the rail and ferry operators. An analysis of the business processes and data harmonization in these systems should lead to the creation of a continuous information "pipeline" going through the logistic nodes (notably the Odessa ports), up to the final destination of the goods.
We are interested in further cooperation with our Ukrainian partners on the use of international recommendations, standards and tools in this area. Yet it is for the Ukrainian stakeholders to build further a strong political will, ensure a step-by-step orderly execution of the project, including the finalization of its analytical phase.
