2009 WCO IT Conference & Exhibition “Single Window: Delivering Business Advantages”

22 April 2009

2009 WCO IT Conference & Exhibition “Single Window: Delivering Business Advantages”

Marrakesh (Morocco), 22 April 2009

Keynote speech by Kunio Mikuriya, WCO Secretary General

It is a great pleasure to deliver the first keynote address to you today in the beautiful city of Marrakech. This has been a trading city and the birthplace of the international agreement that led to the establishment of the WTO. Therefore it is an ideal place for us to get together and deliberate upon the critical issue facing global trade, and in particular the role of customs and other public sector agencies as well as the contribution of the private sector in managing border efficiently by fully using the information technology. At the opening ceremony we learned from the Moroccan Minister of Finance and his Director General of Customs that Morocco had developed a customs IT system called BADR (Base Automatisée des Douanes en Réseau), which means “Dawn” in Arabic. Recapturing this spirit, I hope that this conference & exhibition will cast a new light on the importance of a single window environment.

Let us begin by looking at the global environment in which customs operates and the efforts being made by the customs community to respond to its challenges through the WCO.

The current financial crisis that has affected all of us has indeed led to a dramatic decline in trade and investment. Without careful management at the global level this will create the potential for covert moves back towards protectionism. We must stay vigilant. Fortunately, world leaders seem to acknowledge this risk. Earlier this month the G20 leaders gathered in London to discuss the global financial crisis and the collective measures needed in the fields of fiscal policy, financial regulation and global trade. It is interesting to observe the emergence of a new global governance structure, encompassing developed and emerging markets. It is well established that this need for consultation and international cooperation with emerging economies in managing the world economy should be interpreted as a result of the globalized economy, prompted by technology developments and the trade liberalization policy in many countries. Mindful of the role customs plays in international trade, the WCO issued a communication in March to address the London G20 Summit meeting. In the communication the WCO made three recommendations to support the global trading system while avoiding creeping protectionism under the global financial crisis:

· Importance of accelerated trade facilitation to promote trade and investment;

· Urgent need for capacity building in customs and other border agencies; and

· Continuation of the monitoring role of the WCO and other international organizations of new trends in trade to identify best practices.

These recommendations were taken up by the G20 and echoed throughout their communiqué issued on 2 April 2009. I subsequently received a letter of appreciation from the office of the UK Prime Minister Gordon Brown in his capacity as Chair of G20.

These three WCO recommendations may appear obvious to those who are involved in international trade and we know that in practice they are all related to the theme of this conference, because trade facilitation, capacity building and best practices are best supported by the use of information technology that enables modern customs control, using the techniques of risk analysis, selectivity and targeting. It is all the more beneficial when the IT system is connected to a wide range of public and private sector actors. Needless to say, when we talk about customs modernization, improving integrity is an essential component, where information technology plays a vital part in reducing any unnecessary interface between customs and business. I believe that the need to constantly innovate customs IT systems in support of trade is shared by governments and business alike, because global trade is recognized as part of the solution to the current economic crisis. The record number of participants – almost 600 – to this conference, despite the economic downturn, seems to support my observation. This event also provides an ideal opportunity for building the capacity of customs, as it allows them to share and listen to experiences on IT-based reform and enables them to actually observe what IT is available on the market and how it can improve customs operations.

Now, I would like to move on to the theme of this conference – the single window. Customs administrations have often been at the forefront of the active use of information technology within government in many countries. Along with the increased volume of trade, customs has automated its processing of trade documents. This automation allowed customs to introduce risk management in a systematic manner. Building databases and intelligence systems enabled customs to develop methodical risk analysis, automated selection criteria and intelligence-based targeting. Naturally it is business that first used information and communication technology extensively with the resultant development of supply chain management and e-commerce. Customs has to keep pace with this evolution and should be able to receive electronic data from business and thus develop “e-customs” for efficient control and facilitation of legitimate trade. Other border agencies also followed this shift and started to computerize their procedures. As a result, the business community is now faced with data requirements not only from customs and but also from other authorities responsible for the ports, agriculture, food inspection, trade, environment, immigration and so on. Therefore it is logical for the private sector to be able to submit a single set of data at one time and obtain coordinated goods clearance rather than send different sets of data to various authorities and wait for various replies at different times. This is of course the origin of the single window concept which allows business not only single submission of data with one designated agency, often customs, but also further promotes collaboration amongst border agencies for coordinated control. The single window could have therefore both a virtual or online aspect and a physical aspect.

On the virtual side, business requires coordinated and standardized datasets and its corresponding message not only in one country but also applicable in other countries. The WCO started to standardize customs datasets at the global level following the G7 initiatives that began in 1996. It completed and updated its Version 1 of the Data Model in 2002 and Version 2 in 2005. In response to the request from business for further data and message standardization involving other border agencies, the WCO updated the Data Model to include the essential requirements from customs and other border agencies – version 3 will be finalized by the end of this year. This version will provide a platform for the single window that is consistent with the standards of other international organizations; for example, we actively participate in UNCEFACT standard setting to help maintain this consistency. On the physical side, the WCO is accelerating its movement towards more cooperation, coordination and collaboration with other border agencies through the coordinated border management concept. Here I may mention that there are ongoing one-stop border post projects to integrate border procedures domestically and internationally between adjacent countries. This will bring benefits to business and improve both the investment climate and national competitiveness.

However, I should clarify that the single window concept requires a “whole of government effort”. The difficulties in realizing a single window are not necessarily of a technological nature, but are more related to a range of administrative problems, including domestic coordination amongst different government agencies and enabling legislation. Without political leadership and commitment it is difficult to make progress in solving these administrative and legislative issues as we often observe in the real world. The single window at the international level, involving two or more countries could be the next step. This is why this conference and exhibition will be relevant in exploring how best to consolidate joint efforts by the public and private sectors to achieve a win-win state of affairs. Although one can find currently available technological solutions at the exhibition outside this conference room, we still need to find a solution to the political problem that should be adapted to the situation of each individual country and with adequate sequence.

Now I would like to touch upon the relevance of WCO instruments and its vision that support the single window concept. The most famous WCO standard is probably the Harmonized System of 1988 which harmonized tariff classification and which offers a framework for basic data of goods being traded. The Revised Kyoto Convention to simplify and harmonize customs procedures, adopted in 1999, provides modern principles for customs operations, namely a partnership with business, use of information technology and risk management. This instrument also serves as the basis for the larger majority of the proposals tabled at the ongoing WTO negotiations on trade facilitation. Subsequently, in the post September 11 environment, the WCO adopted the SAFE Framework of Standards in 2005 to address security concerns and the development of safer origin-to-destination movement of goods along the IT-based international trade supply chain. The SAFE Framework consists of four core elements, namely, transmission of advance electronic data, consistent risk management based on the online exchange of intelligence, export control using technology, and a partnership with compliant businesses equipped with secure IT systems. Consequently, it presupposes the active use of information technology and therefore supports the WCO Data Model and the single window concept. One of the current issues in trade is the US legislation that requires mandatory 100% scanning of US-bound cargo by 2012. In this regard, we believe that enhanced risk management as embodied in the SAFE Framework provides a more realistic and efficient alternative to 100% scanning.

The transformation of customs from essentially fiscal functions to focus more on border management to protect security and society while facilitating legitimate trade resulted in the new vision of the customs community, incorporated in the WCO policy document “Customs in the 21st Century” that was adopted in 2008. It includes ten pillars of which I will mention the first two. The first pillar is “Globally networked customs” which implies that customs around the world will increasingly act as a network, connected electronically. The single window at the international level could be of great relevance here. WCO committees and many regions envision that this aspiration is of a long-term nature and should start as a bilateral project and later expand to the regional level to prepare for the global level. There is one session in the conference dedicated to this pillar. The second pillar is “coordinated border management” or CBM, where the single window will be an essential element. The WCO will organize a panel at its annual Council Sessions to discuss the tools for CBM. This will be followed by a forum on CBM right after the Council on 29 and 30 June during which other border agencies will be invited to begin a dialogue on this issue.

Finally, I would like to once again express my sincere thanks to the Moroccan Customs administration for its co-organization of this conference and its generous hospitality. I hope that participants will seize this opportunity to jointly reflect on the future of cross-border procedures and the role of innovation.

Thank you very much for your attention.