“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
“Transport” # 24 (712) dated 13 June 2012
Joint Efforts Enable to Progress in the Chosen Direction:
Outcomes of the Seminar “Single Window Concept of Odessa Region Ports”
The current position on the world market is determined primarily by its increasing globalization. The globalization is developing rapidly: companies purchase raw materials in one part of the world, process it in another one, and carried out the final assembly of the products in the third one. As to the final product, it may be sold in many countries whose geography is not limited to a single continent. Because of this growing trend the tendencies to increasing number of raw materials and commodities supply transactions, and supply by smaller shipments with longer periodicity, which inevitably leads to an increase in workflow, are strengthened. This globalization of markets results in the growing need for trade facilitation and growth of efficiency of information exchange processes. The trade facilitation issues are becoming increasingly important for Ukraine, too, under the conditions of its integration into European and world markets.
The main goal of trade facilitation is streamlining market mechanisms and removal of bureaucratic and administrative barriers, which are prerequisites for corruption. Trade facilitation in Ukraine may be an important factor for attracting foreign investment and innovative technologies needed for its development. The measures toward trade facilitation have been accepted as one of the priorities of the Government’s country development program.
The International Seminar on Trade Facilitation “Local Single Window Concept (Information Management System) of Odessa Region Ports in the Process of European Integration of Ukraine”, which was held on 30 May in Odessa. The seminar was organized by the UN Economic Commission for Europe (UNECE) with the support of JSC PLASKE and in cooperation with the Ministry of Economic Development and Trade of Ukraine, National Institute for Strategic Research, Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine) and with participation of the Association of Freight Forwarders Organizations of Ukraine UKRVNESHTRANS.
That was the second international seminar held on the topic (the first one took place in Odessa on 1 June 2011 and was dedicated to the discussion of the single window concept and the issues of integration of rail transportation modes during trade facilitation on the territory of all-European space). This year, the seminar was attended by about 100 representatives of government agencies, relevant public associations and business communities from 11 countries (Belarus, Latvia, Lithuania, Moldova, Poland, Russia, USA, Ukraine, France, Czech Republic and Switzerland).
When opening the seminar Oleg Platonov, the event Session I Moderator, President of UKRVNESHTRANS Association, Vice President of ICC Ukraine for Strategic Development Issues, noted that simplification, harmonization and automation of trade procedures, as well as introduction of international and European standards for the data and documents exchange, are very important for trade facilitation. Resumption of economic growth in the country, including its renewal due to the work with the innovations in the trade facilitation field and the usage of Single Window, can become a lever for improving the competitiveness of Ukrainian products.
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The 1st Session of the seminar was devoted to implementation in Ukraine of a pilot project of the port information management system (Single Window for the export, import and transit clearance) and exchange of the best international practices in this field.
Viacheslav Voronoi, Chief of the Logistics and Commercial Work Service of the Odessa Commercial Sea Port, briefed the participants on the electronic data exchange projects implemented by the Port and the short- and long-term plans of work in this direction. He noted that until recently almost the entire document circulation, information exchange and work planning at the Ukrainian ports were carried out in the paper form. It is not enough that this system of information exchange is obsolete; it is extremely dependent on the human factor in addition. Given this, there is a need of development of information technologies at the Port, which will enable moving to a qualitatively new level of freight traffic management to increase its volume and ultimately improve the image of Ukraine in the international arena. BY this time the Odessa Port has implemented 4 projects in the area in question: managing containers and tankers in the free pratique mode; electronic pass – an automatic access control system at the Port, which provides for issuance of multi-circulation electronic cards instead of paper passes; e-planning of transport vehicles entering the Port and integration of control technical means (scales) in the information system of the Port. Next the Port is planning to introduce the electronic withdrawal slip and carry out other improvements. The Reporter noted that the State Customs Service chose the Port of Odessa to be the base for implementation of the “electronic work order” pilot project. However, the concrete results, in V. Voronoi’s opinion, can be demonstrated by the Port not earlier than in 2-3 months as it is required to provide for support of the electronic digital signature system, pass the state certification, develop the software, etc.
The theme of electronic data interchange projects implementation in Ukraine was continued by Ivan Liptuga, Vice President of PLASKE. In his speech he introduced the pilot projects implemented JSC PLASKE:
on interaction of UAIS SCSU and NCTS systems (intermodal transportation of mineral water by the truck with a canopy body was carried out from Nabeglavi (Georgia) to Riga (Latvia) through Poti - Illyichevsk ferry service and entry into the EU in Lithuania with application of electronic declaration for the first time in Ukraine, 2009);
on goods electronic declaration (declared was the transit goods importation into Ukraine by maritime transport, further transhipment and removal from the territory of Ukraine by rail, 2011);
on goods electronic declaration using GPS GSM navigation technology (declared were the containerized goods carried from Istanbul (Turkey) to Odessa (Ukraine) and then along the Viking train route to Klaipeda (Lithuania) with the application of GPS GSM navigation technology that allowed to track the location and condition of the container throughout the route, 2011); and
on introduction of the “Single Window - Local Solution” system at the Odessa CSP, which includes the establishment of a service centre for receiving, processing and dissemination of information to all interested parties exercising state control for the purpose of making decisions on the goods border crossing (the implementation of this project was provided by Recommendations of the First International Seminar of UNECE).
I. Liptuga noted that the implementation of the above projects allowed for marking out both the positive aspects (the use of paperless technology in trans-border cargo carriage, which are more than obvious (significant time and operating costs savings and elimination of corruption component in process of control), and the negative ones: technology used by SCSU in working with electronic documents is imperfect (only cargo customs declarations are provided in the format of an electronic record, while the accompanying documents – in the form of paper documents scanned copies).
The speeches of the following Seminar participants were the logical continuation of the discussion on the problems stressed by the previous reporters.
Pavel Pashko, Adviser to Head of Information-Analytical Authority for Provision of Head of SCSU Activity, in his speech outlined the new form of customs control stipulated by the new Customs Code; it is the control of comparison, a part of the so-called “information and customs control”. Such type of control consists in comparison of the information provided by FEA participants with the same received by the customs authorities from other sources, and is a prerequisite for integration into the global customs network, on whose establishment WTO insists and which is already being focally established in individual countries. Thus, EU have implemented the customs program NCTS, the information exchange system that has been created between 6 Balkan countries. The Ukrainian customs, according to P. Pashko, is also actively developing in this direction: agreements of mutual information exchange were concluded with Moldova, Russia and Georgia. On 29 May 2012 a group of experts signed a protocol, in which the Turkish side, for the first time in many years, declared their desire to start the work on exchanging the customs information, in particular on the pilot project concerning the information exchange between the two ports on the Black Sea, which will be chosen by the parties to the agreement. At the same time he noted that the transition to the electronic data exchange between regulatory authorities in Ukraine faces many obstacles including the system developers’ inertia in comparison with the rate of the information space development, long misunderstanding of the system design principles, inconsistency concerning definition of the process moderator, unpreparedness of many regulatory bodies for the transition to the electronic exchange of data, etc. Moreover, the indicated problems are characteristic of not only Ukraine, but also of other countries including Russia and European countries. In this regard P. Pashko noted that the importance of this Seminar is undeniable as such conferences provide impetus for the development of social thought, which should be embodied in the so necessary normative documents.
Mario Apostolov, UNECE Regional Adviser on Trade, devoted his report to summarizing the work outcomes since the previous Seminar (June 2011) and to the ways of further introduction of Local. Over the past year following results were obtained: the interagency Working Group for Single Window Introduction finishes the work on the concept formulation and the Port of Odessa began the work on the system design. M. Apostolov stressed that there is still the analysis of business processes in the Port of Odessa ahead, determine the readiness of the legal framework for the Single Window introduction and the willingness of technical systems for information exchange by means of the Single Window, as well as the possibility of the system introduction on the basis of state - private partnership. M. Apostolov defined the initial standardization of information exchange processes and reconciliation of data on the bases of international standards as particularly significant point in the process of development and implementation of the system. He noted that due to a significant decline in 2010 of such most important indicators of the Ukrainian transport system as the Logistics Performance Index (from the 73rd position in the world in 2010 to the 102nd one in 2011), efficiency of customs clearance (from the 97th to the 135th), cargo tracking possibility (from the 81st to the 112th), etc. the relevance of the work on introducing IT technologies in this sphere is obvious and undeniable. However, in 2012 the above figures were somewhat improved, but that was evidently not enough. In addition, stressed M. Apostolov, the introduction of the Single Window is a project that pays itself back rather quickly and gave the confirming calculations based on the EAPCS data. In conclusion, he emphasized that it is most effective to implement the Single Window on the basis of state-private partnership (SPP), which requires determination of the legal framework and potential participants of the implementation process, assessment of the business climate, etc. concerning SPP in Ukraine and in Odessa in particular.
Richard Morton, Secretary General and Director of the European Port Community Systems Association (EPCSA), shared the experience of creating autonomous information exchange systems at the ports of different countries. He briefed the Seminar participants about the activities of their association, which works in the system of ports information service (SPIS) on the neutrality principles. The organization was established by six major operators of the European port community (Le Havre /France/, Rotterdam /the Netherlands/, Bremen /Germany/, Felixstowe /UK/, Barcelona /Spain/ and Hamburg /Germany/) in June 2011. At present the Association also has seven associate members in the EU countries (Belgium, UK, Germany, Spain and Italy) and Israel, and in the system of the ports information service its users handle more than five million e-mails per day. R. Morton said that EPCSA had developed a manual “How to Implement a Port Community System” meaning that community is the participants working in the system. The process of implementation consists of 12 stages, each of which he elaborated on in his report. R. Morton stressed that the port community system should serve as a neutral and open electronic platform providing intelligent for the intellectual and reliable exchange of information between the state and private stakeholders for improving the competitiveness of sea ports. The system work principle is the management optimizing and the port and logistic processes automation through the unified presentation of the data and connection of the transport and logistics chains.
The topic of state-private partnership in the implementation of the Single Window in the ports was developed in the report by Olivier Moreau, Vice President for Business Development, Government Services and International Trade Department, Bureau Veritas. As the speaker stressed the successful implementation of the Single Window requires extensive experience and expert’s appraisal of the best solutions in their class. No less important is the understanding of local conditions either, as the Single Window is not purely an information process and the system must allow for the interests of all stakeholders (regulatory bodies, business entities and the system moderators) and simplify the processes of their interaction to the utmost. Thus, the successful implementation of the system requires five key success factors: a high-level political support, participation of all stakeholders in the system development, transition to the overall coordination of participants’ actions, monitoring of the best practices and compliance with international standards. The state-private partnership is the most effective way of achieving success with all of the key factors simultaneously as it combines the best achievements of the private sector based on its resources, management skills and information technologies and those of the state sector based on its regulatory activities and protection of public interests. At the same time the most important component of success in the implementation of the Single Window on the SPP principles is an arbitration agreement that would clearly separate the functions of the users and operators, their responsibility, the process timeframe and the mechanism of profit distribution.
Gennadiy Lupu, Deputy Director General of TransInvestServis, shared the information about the role of “dry ports” in ensuring the supply chain with the use of electronic document circulation with the audience. A “dry port” is a territory in the rear of a sea port connected with it by a road (a motor road or a railway line), in which stevedoring operations are carried out. According to the speaker, dry ports have several advantages over the sea ones including the possibility to develop depressed areas, a substantial advantage in view of the price of significant cargo volumes storage in the port area, the ability to avoid traffic congestions on the approaches to the port, the ability to serve as a distributor for the individual business entities, etc. Dry ports are especially effective in the integration with several marine terminals. On this account the development of electronic document exchange is quite topical at this stage from the point of view of the perspective of dry ports development into logistics centres.
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Session II of the Seminar moderated by Mario Apostolov was devoted to the application of transport documents in the Single Window system.
Andrei Videnov, expert on post-entry control and audit, EU Mission for Border Assistance Moldova and Ukraine (EUBAM), familiarized the Seminar participants with new forms of customs control and the prospects of further expansion of trade facilitation in EU. The study of the Organization for Economic Cooperation and Development (OECD) on the effectiveness of goods movement procedures found that every 1% of savings the costs related to trading operations provides worldwide savings of US$43 milliards. In connection with this international trade facilitation trends in Europe have increased. The main initiatives of the European Commission and Member States concerning the application of the trade facilitation concept was the implementation of the SAFE framework standards, whereby introduced were: NCTS system; export control system; system of registration and identification of economic operators including single numbers for customs and for each subject of FEA; common database, which is used by the customs authorities of all EU and common Internet portal for business; and a complex of risk management measures aimed at management harmonizing through inspections based on risk analysis and IT applications. Implemented is a system of import control. A. Videnov also informed the audience about EUBAM being in talks with Ukraine and Moldova on ensuring the unification of minimum requirements to the issuance of the certificate of authorized economic operator and equal benefits for them.
Development of electronic corridors between Europe and Asia on the example of the Viking contrailer train project implementation was discussed in the Report of Robert Pinkock, Senior Consultant of ICITAP Project, US Department of Justice. He noted that the shippers often called the uncertainty concerning timely delivery, as well as other financial risks compared with other modes of goods delivery between the Black Sea countries and northern Europe as the reason for this project lacking popularity. In this connection there arose the need to introduce on the routes the GPS-technologies and accelerated movement of the railroad freight trains, implement the electronic customs declarations, as well as the analysis of the risks specific to the railroad corridor. Appropriate arrangements had been reached between the Governments of Ukraine, Belarus and Lithuania. In the future we plan to introduce GPS-tracking service, electronic seals and stamps, facilitate the preparation and implementation of appropriate software for the Customs Service. In addition, it is planned to start work on the introduction of the railway corridor on the Russia-China route.
Vitaliy Stratan, Consultant of Customs Control Department, Customs Service of Moldova, informed about the problems of the Single Window introduction in Moldova. The introduction of the Single Window is one of the priorities of the Moldova Transport Service. Besides, the Single Window introduction corresponds to the measures taken toward Moldova's accession to the International Convention on the Harmonization of Frontier Controls of Goods, which provides for the ability to transfer powers of other monitoring services to the customs and border authorities or their location within the country. The moderator of the Single Window in Moldova is the Customs Service, through whose server the necessary information between supervisory authorities is exchanged. All checkpoints are able to exchanged information on persons and vehicles, which significantly reduces the processing time at the border. The Customs Service receives information from some government agencies whose functions have been transferred to the Customs (international road haulage service, Ministry of Environment, etc.). Developed and approved is the Order on interaction between the Customs Service, Phytosanitary and Veterinary Services that are required to develop software to be compatible with the transport vehicles database in order to transmit the data on the issued permits. At the same time, on the recommendations of EU experts, phytosanitary and veterinary control have returned to the border.
A report on the implementation of the electronic railroad bill of lading CIM/SMGS in the railway international traffic was made by Erik Evtimov, Deputy Secretary General of the International Rail Transport Committee (CIT). He familiarised the audience with the structure and members of his organization and outlined the purposes of its activities. E. Evtimov informed that in order to organize the electronic document circulation including the international directions CIT launched a new project at Ukrzaliznytsia. To achieve this goal it is required to take the following three steps: provide legal, functional and technical specialisations in the industry. The speaker stressed that the strategic goal of CIT is full transition to electronic data exchange between the participants of the rail transport, while the transition to the electronic work order in terms of the legislation has priority. He stressed that the pan-European legal regime for railways and electronic railway bill of lading CIM / SMGS will accelerate the implementation of the National Transport Strategy of Ukraine until 2020 and significantly affect the increase in the transit through the territory of Ukraine.
The highlights of the transit development strategy in Ukraine, Yelena Yemelianova, Senior Consultant of Sectoral Economy Section, the National Institute for Strategic research, noted in her report. She said that according to the estimates of expert scientific organizations of Ukraine and foreign experts, the volumes of the international transit in Ukraine had to be determined before 2010: in accordance with an optimistic forecast, 270-280 million tons, while in accordance with the pessimistic one, 230-240 million tons. In fact, during 2005-2011, excluding pipeline transportation, the volumes of transit transportation by rail transport decreased by 33.5% and amounted to 90.2% of the total transit; road transportations increased 7.9-fold and their share in the structure of the transit flows increased more than 10-fold; carriage by sea transport increased from 3.8 million tons up to 3.9 million tons, and its share increased from 4.9% to 6.7%; the usage of airspace doubled (from 1.4 tons to 2.8 tons) and remains insignificant for the time being; the river transport in a 2005-2008 period witnessed a 7.4-fold growth of transit cargo volumes, but during the financial and economic crisis they were completely lost. That is only 50-70% of the capacity of the transport infrastructure of Ukraine, which is 60-70 million tons of goods per year (+200 million tons transferred by means of pipelines) is used. Thus, ensuring the growth of the transit potential of Ukraine requires accelerate a reform of the transport sector including introduction of new technologies, customs control with the use of modern technical means, trade facilitation including the same during crossing the border, as well as the “Single Window - Local Solution” pilot project implementation in the operations zone of Pivdenna Customs and ports. As a result of consistent implementation of the above stated measures will include stable or increasing in the future volumes of transit cargoes, effective use of the freight transport opportunities including the information and process systems and their improvement through the introduction of new informatisation technologies, as well as improvement of the environmental situation due to the development of the mixed (multi-modal) and combined transport.
In the course of the debate Nikolai Golubiatnikov, Chief Sanitary Officer on Water Transport, shared his opinion concerning the problems raised at the Seminar. He supported the concept of introducing a Single Window noting problems of implementation of the preliminary documentary control. In particular he said that SCSU after signing the relevant agreement has gained access to the database of the State Centre, to the Ministry of Health registers on inspection conclusions of the State Sanitary and Epidemiological Service, but the experts of the said Service still have no access to the cargo turnover electronic system of SCSU and actually they are strangers to the situation prevailing at the border as to the imported products security issues.
Leonid Muromtsev, Chief of Non-Tariff Regulation Section, Department for the Goods Classification and FEA Control Measures, SCSU, noted that on the basis of several-year technical cooperation with the UNECE Article 319 concerning the trade documents control on the Single Window principle was incorporated in the new Customs Code of Ukraine, which entered into force on 01.06.2012.
As it was noted by Marco Sorgetti, Secretary General of FIATA, in the 21st century the places of collection and verification of information about the cargoes do not coincide with physical boundaries. The notions of what information is required and who claims it are being changed themselves. The problems of threat assessment and risk management are no longer settled at the border. But at the same time, he stressed, FIATA is open to dialogue with all partners on the topic of how to facilitate trade under new conditions. FIATA develop all their documents in the electronic form and is ready to cooperate with UNECE on these issues.
During the discussion other participants of the event also shared their views on the above issue. They discussed the development of the Local Single Window project after the first Seminar held on 1 June 2011. In particular, they noted the progress in the establishment of the organisation framework of the project: the interagency working group to support the project has been established, which has already held three meetings; the Port of Odessa has already started technical work on designing the system of the Port information service; a memorandum of cooperation for the implementation of the project has been signed between the OCSP Administration and JSC PLASKE.
In this regard, the participants noted the successful decision of the organizers to arrange for a technical visit to the Port where they were able to get acquainted with the work of the individual elements of the future Single Window System on the eve of the Seminary.
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The workshop provided a unique opportunity to link the issue of automation of the unified CIM/SMGS railroad bill of lading with the “Single Window - Local Solution” subject. Thus, it became apparent during the Seminar that the electronic railroad bill of lading, as well as the international data exchange standards, are possible to and should be used for the smooth data exchange between different systems of the industry branches (for example, between railroad enterprises, customs and other control authorities), and for development of new solutions for the customs transit (for example, for that of Moldova having no outlet to the sea) by using the Single Window at the ports of Odessa Region.
The participants noted the event is quite relevant just now, when the role of simplification and automation of trade procedures is growing and in view of the strategic position of Ukraine as a transit country and the economic integration of the country into the European space, and made, among the others, the following recommendations:
recognize recommendations adopted by June 1, 2011 as valid in general;
continue to work on the formation of political will in support of establishing an information service system for the ports of Odessa Region (Single Window) including the same based on the correspondence with Prime Minister of Ukraine;
continue designing the organizational structure of the system users community, which will unite the port authorities, customs service, business community and others;
appoint the leading organization for implementation of the system;
form an organizational structure of the users community, which can in conjunction with SCSU and Administration of OCSP coordinate the further implementation and use of the system of information servicing the ports of Odessa Region;
develop a model agreement and sign such an agreement between the system operator and each user;
establish a fund for the “Single Window” project implementation on the basis of state-private partnerships for the purpose of consolidation of investments and public use of the funds;
use the international standards and technical cooperation with international organizations (UNECE, WCO, ISO, European Commission, etc.) in establishing the system;
consider the experience of European ports and the business community in the implementation of electronic information exchange.
In conclusion, Oleg Platonov summed up the Seminar outcomes and appreciated the invariable attention of Nikolai Azarov, Prime Minister, to the given project. In addition, he noted vigorous activity of Mario Apostolov, UNECE Regional Adviser, in the project and providing methodological support. According to Oleg Platonov, the joint efforts allow to move in the intended direction, which is very important for Ukraine possessing a great transit potential, and proposed that the next Meeting of the Interagency Working Group for the “Single Window - Local Solution” technology implementation should be held at the end of June this year in the operations area of the Pivdenna Customs and ports of Odessa Region for the purpose of devising a concrete action plan.
