From UIPS of One Port to the System for all Ports
On 30 May this year in Odessa the conference hall of the Bristol Hotel received the Third International Seminar “Trade Facilitation in Ukraine and ‘Single Window – Local Solution’ Project.’ Achievements and Prospects." The organizers were the Economic Commission for Europe (UNECE) with the support of the Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine) and the Association of Freight Forwarding Organizations of Ukraine UKRVNESHTRANS. The Seminar was attended by Ruslan Koshulinskiy, Deputy Chairman of the Supreme Rada of Ukraine, Vladimir Schelkunov, President of ICC Ukraine, Mario Apostolov, UNECE Regional Adviser on Trade, Oleg Platonov, President of the UKRVNESHTRANS Association, Deputy Chairman of the Interagency Working Group for Implementation of the “Single Window – Local Solution” Technology in Operations Area of Pivdenna Customs House and Odessa Region Ports, Stanley Lim, FIATA President, governance of the Customs Department, the Ministry of Revenue and Duties, specialists of Odessa Port, representatives of Pivdenna Customs and maritime industry professionals.
It may be said without exaggeration that the main protagonist at the Seminar was the Port of Odessa, who was the first in October 2012 in conjunction with the software developer PPL 33-35 Company to introduce an electronic work order having integrated all the participants of the transport process in the unified information port community (UIPS). It is no coincidence that Anatoliy Gutnik, Deputy Director of the Customs Department, Ministry of Revenue and Duties, said, “the implementation of the ‘Single Window – Local Solution’ Project in Ukraine, which only operates at the Port of Odessa, is one of the strategic development directions of the Ministry of Revenue and Duties. Based on UNECE developments this system will give such positive results as the development of information technologies, processes of trade and facilitation of customs clearance of the goods arriving at this country.” M. Apostolov added that the ENPI project implemented by the Port of Odessa “can be regarded as a pilot one, on whose basis a system for the entire port industry should be designed. But for this purpose the legislation needs to be changed in order to remove the barriers to information exchange between all participants of the foreign trade process.”
Odessa Port is no Stranger to Making Headways
Seven months ago, on 8 October 2012, the Port of Odessa together with the Plaske organization issued the first electronic work order. Until 2 April this year the electronic work order had been used in test mode. And on 2 April the operation of UIPS started; the main objective of the system is the issuance of electronic work orders. The paper work order is still used in parallel. During that time 25,000 containers were cleared electronically. Viacheslav Voronoi, Chief Logistics and Commercial Work Service, SE OCSP, told how it all began.
It seemed that the paper document circulation and planning on paper were immutable at the Port of Odessa as there was the tradition, as everyone had been accustomed to such a system. Meanwhile, the European and world experience suggests otherwise: there the obsolete nonperforming hard copies have been told goodbye long ago and the electronic ones have been switched over to. That has not only simplified the process of the goods clearance, but also excluded the human factor, which caused a lot of inconvenience and abuse.
“Development of information technologies and learning from foreign experience during the Odessa port’s experts training at the Ports of Marseilles, Antwerp, Hamburg and Rotterdam allowed us to move to a qualitatively new level of cargo flows servicing and enhance the image of our country in the international arena. UIPS is intended for integration of all participants in the transport and cargo process at the port into unified information space with the possibility of providing access to the information used in the framework of technological processes with application of technical protection of the state standard. The purpose of the system is minimizing paper document circulation, organizing technological processes and reducing the time spent for each operation by providing all the transport process participants with the correct and legitimate information,” V. Voronoi noted.
On 22 May 2012 the Port of Odessa and the State Customs Service of Ukraine signed the Process Scheme of the UIPS system first stage “Single Window – Local Solution” introduction. That became possible as a result of five-year consistent work of the Port of Odessa, Plaske Organization and SCSU supported by the Ministry of Infrastructure of Ukraine: a number of standard documents have been adopted and laws of Ukraine, resolutions of Cabinet of Ministers, orders of SCSU and other departments have been amended.
By that time the Odessa Port had implemented 4 projects: free pratique, electronic pass (access control automatic system ACAS) – issuance of multicirculation cards instead of paper passes, electronic planning of transport arrival at the Port and integration of technical means (weight complexes) in the Port information system. The first stage includes the entire process – from the imported container arrival at the port to its removal from the territory of the enterprise to the final destination. The only thing lacking is the analysis of the customs risks, which, under the current legislation, are performed directly by the State Customs Service of Ukraine.
In January and February training seminars for employees of Pivdenna Customs, freight forwarders (154 companies), representatives of phytosanitary, ecological and other regulatory services were held.
If until recently the electronic work order was operated in the endorsement mode and issuance of cargo documents, then from 20 May the stage of permits for exiting the Port has been involved. Connecting the control authorities and testing the information exchange with stevedoring companies are at their final stage; contracts with linear agents of providing preliminary information are concluded and the test data exchange with them is initiated. As at 20 May 351 forwarding company were connected to the Port system, i.e. practically all those who work with the Port of Odessa. So, the first phase of the electronic work order introduction is nearing its completion,” V. Voronoi said.
In the near future, according to V. Voronoi, UIPS will dispose of the complete information starting from the preliminary data on the arrival of the cargo on board the vessel, its actual unloading to containers arrival at the Port, then their discharge in the warehouse territory, issuance of the electronic work orders for the containers removal, endorsement of these orders by the authorities, and ending with the permit for removal the containers from the checkpoint to the final destination.
Secrets Developers’ Know-Hows
According to Law of Ukraine “On Electronic Document and Document Circulation” any electronic document must necessarily be certified by the electronic digital signature (EDS). As Galina Roisina, Director for Production, PPL 33-35, noted, originally it was planned that the UIPS system will start to operate from 1 February. But at the beginning of the year the transition to the EDS unified format began in Ukraine and it was only finalized in April. The peculiarity of an electronic document in UIPS, according to G. Roisina, is that it may include several electronic documents. For example, an electronic work order consists of three electronic documents linked together: the actual electronic work order, coordination with the Customs Service and exit coordination with the Border Service. Each of these electronic documents can be signed by keys issued by various Accredited Keys Certification Centres (AKCC). For example, the Customs Service obtained the keys from the SCSU ACKC, freight forwarders – at the customs or commercial structures, the border guards got the keys at Mindohodov, etc.
Thus, UIPS turned to be dependent on the interrelations between all ACKC. If the user wants to look through the whole composed document, but there is no communication with at least one of ACKC, he cannot do it. It was such situation that we faced at the beginning of this year when Ukraine passed over to the new format of EDS. Contact with ACKC is required in order to check the legitimacy of the digital signature and for obtaining a legally provable time stamp to fix the time of the data supply to the system during registration of each operation, e.g. filing the work order, its endorsement, etc. and for obtaining the time stamp for the data incoming from the servers to the system,” G. Roisina informed.
The first stage of the system certification, development and approval of the information state protection technical specifications, has been passed. The second stage – the implementation of these requirements – is being finalized. The third stage – examination and obtaining the certificate of the system’s conformity to the security level – is planned to be completed by the end of this year. By the way, such level of security cannot be provided by the majority of such systems operating at the world developed ports. For example, in Antwerp the electronic digital signature is not even used when exchanging data. We cannot but hope that the same level of trust between government and business will eventually be reached in Ukraine.
“The integration of the transport process participants in the system may be divided into two components: government agencies and private business. If according to the standing legislation we have to apply a high level of identification and electronic digital signatures to the government agencies’ documents, then a lower identification level may be applied to the document intended for the exchange between private businesses. Naturally, this can only be done, if the corresponding agreements are concluded between all transport stakeholders,” G. Roisina summed up.
Customs Seize the Project Implementation with both hands
Any innovation faces caution. However, as Yuriy Sokolov, Deputy Chief of Pivdenna Customs, the Ministry of Revenue and Duties, noted, their department joined in the “Single Window – Local Solution” Project implementation from the very beginning of the year.
“The importance of this issue was reinforced by the new customs legislation, which entered into force last year and provides for a somewhat different format of goods storage at sea ports. On the one hand, the responsibility of container operators, stevedoring companies and, accordingly, the Customs Service for goods safekeeping increased. On the other hand, under the new legislation a part of functions of some control authorities at the checkpoints was assigned to customs. That is why the concept of the “Single Window – Local Solution” Project providing a unified information system for all control services was very relevant for us. After all, if we have preliminary information on the inbound cargo and are aware of the limitations or warnings, we can respond quickly and, accordingly, inform the consignee and freight forwarder on any formalities in advance,” Yuriy Sokolov noted.
Over the past months the Customs Service have significantly progressed in the implementation of the “Electronic Work Order” project. All employees involved in the issuance of electronic passes at the Port of Odessa have been adequately trained and 14 working places have been equipped, where the customs officers can see the whole document passing process in real time.
“However, there are things that need to be improved. First, we are not satisfied with the work orders duplication in the electronic and paper forms. Next, any movement of the container, whether it is imported, exported or empty, should be recorded in the system. For the time being it is not done. Why does it matter a good deal to us? There has been an incident at the Odessa Port, where one of the brokerage firms, having forged the Pivdenna Customs’ seal on paper, tried to bring a container with expensive goods out of the Port area. Fortunately, the crime was prevented by law enforcement officials and legal steps were taken. Nevertheless, an attempt of unauthorized removal of a container with highly liquid commodity whose value exceeded half a million hryvnias out of the Port forced us to speed up the introduction of the electronic work order in full capacity. That incident confirmed once again that the regulatory authorities cannot continue to work without the introduction of electronic document circulation and without the electronic visa being applied by all transport process participants.”
The purpose of the electronic work order in terms of the Customs Service, according to Yuriy Sokolov, is to collect all the necessary data, apply modern forms of control, introduce them to the freight forwarders and cargo owners, and thus prevent the undesirable situations with cargoes at the ports. Today the customs receive the preliminary information about the containers arrival at the port from the agents. “However, such information is not sufficient for making certain decisions or determining the required forms of control. The UIPS presupposes gathering all the information that comes from all the participants of the transport process and accumulating it on the server for the inspector to be able to determine what form of control should be applied to the cargo before the container arrival. This requires harmonization of database, i.e. combining the system of the Pivdenna Customs, UIPS and stevedoring companies for the customs inspector to see all the container’s characteristics: the information of the consignee and carrier and the results of all forms of control carried out at the port. As a result, we come to the fact that it is necessary to legislate the use of preliminary information obtained from UIPS by the customs inspector, i.e. to make additions to Resolution of the Cabinet of Ministers # 451 and redraft Order # 677 as the latter does not allow the customs officer to make a decision concerning the coming preliminary information,” Yu. Sokolov summed up.
Stanley Lim, President of FIATA, spoke about the role played by the preliminary information in making decisions by the control bodies. “Thanks to Single Window all participants of the given process may exchange preliminary information. Connected to it are not only the ports, but also airports, banks, cargo owners ... The permit for the shipment is obtained by the consignee 24 hours before the arrival of the vessel at the Port of Singapore. The whole inspection procedure at this port takes no more than 5 minutes ...” As is known the U.S. Customs will not give go-ahead for unloading or banning any container without preliminary information. The information about the arriving cargoes comes in good time before the goods arrival. Therefore a decision on the cargo inspection or its omitting is made within a few minutes.
As Pavel Pashko, Deputy Chief of the Customs Control and Clearance Section, Customs Department, Mindohodov, noted, “the uniqueness of the “Single Window – Local Solution” Project is in the fact that it is possible to build up a complete chain of goods movement. Eventually it will be possible to simplify their border control procedure as even if the taxes on the goods are not paid at the border, they will be charged inside the country. Single Window is a mechanism of procedure simplification... A peculiar checkpoint “filter” has been organized in the Odessa Port. Any movement of a truck or a lift of the gate is technically organized in such a way that such information accumulates in the system. Until now none of the systems that have been used on the land borders in Ukraine, has not been implemented as it is done at the Odessa Port, that is the possibility of uncontrolled passage of goods is completely ruled out here. The systems operating in the port of Odessa should be extended not only to the ports, but to other checkpoints, too ...”
Pending the discussion, in which Andrey Videnov, Expert on Post-Customs Control and Audit, Martin MacGold, Chief Economic Officer of Transport Department, UNECE, Igor Khobotov, Director of “MSC Ukraine”, Dmitriy Yakimenkov, Chief of Information Technologies Service, SE OCSP, Mario Apostolov and others, took part, suggestions concerning the extending the Odessa Port’s experience on UIPS implementation to other ports and border checkpoints were made; the participants spoke about the cooperation of the government agencies and businesses in accordance with the Recommendations of the World Customs Organization and other European institutions, about establishing a national concept of customs procedures simplification and trade promotion, transferring a part of the customs control functions to business, implementing risk analysis in connection with reorganization of state control structures, establishing a customs audit, the customs bodies’ assistance to businesses in order to reduce risks, exchanging information between the national customs organizations, etc. In conclusion it is important to note the statement of R. Koshulinskiy who, addressing the specialists of the ports, customs services and all participants of the transport process said that the parliamentarians expect them to make proposals concerning amendments to the legislation for the purpose of promotion of the “Single Window – Local Solution” Project.