21 May 2019
The entire world is turning to digitalisation, but when it comes to customs and tax declarations, the logistics industry is still wasting money on paper. According to Mia Mikic, director of the Trade, Investment, and Innovation Division at ESCAP, “customs and tax procedures and cargo inspections account for up to 75% delay of shipments, and that ‘red tape’ could cost up to 15% of the value of goods traded.” Paperless transactions will enable both shippers and transporters to more rapidly, securely, and efficiently handle increasing volumes of international trade.
Total dematerialisation is an essential part of the strategy of the European Commission for the Customs Union. Their goal is twofold: to enhance the competitiveness of European businesses by facilitating trade, and simultaneously enhancing external border security, the result will be a more efficient and modern customs environment. The Customs dematerialisation project began in 2003 and will replace all customs procedures that are on paper with electronic procedures by 31 December 2020 (at which date 100% of customs procedures must be dematerialised).
A key component to achieving the zero-paper goal is the implementation of a Single Window for Trade (SW). The UNECE describes the SW as "a facility that allows parties involved in trade and transport to lodge standardised information and documents with a single entry point to fulfil all import, export, and transit-related regulatory requirements."
In practice, SW allows simultaneous submission through a single entry point of customs and other government agency information, and enables the approving officials to clear an entry in a shorter time frame. It does so by facilitating the exchange of trade-relevant information between traders and government agencies, and amongst government agencies, for obtaining permits, licences, certificates, and other necessary approvals.
In France, French Customs is developing its own national Single Window (Guichet Unique National, or ‘GUN’ in French) for administrative formalities at the border. Thanks to the GUN, companies no longer have to travel to obtain validation of authorisations, licences or certificates required by more than a dozen public administrations at the time of Customs release for goods subject to special regulations (strategic goods, products of animal origin, etc.).
Paperless clearance does away with the need for hard-copy exchanges between trade and regulatory authorities, eliminating the need to print and manually attach documents to shipments. Printed or handwritten documents can be illegible or mislabelled or lost, resulting in processing problems that lead to costs and delays.
Paperless processing also means that regulatory authorities can instantly communicate their decisions on release/hold/payment of shipments electronically, thus greatly reducing costly waiting times.
Although having things on paper may be reassuring to some, it’s important to understand that all e-documents will be referenced in Customs declarations and that these references will identify the permanent location of the e-document, so no information can ever be lost. For added security, digital signatures are a reliable means of maintaining data authenticity and integrity. Moreover, all e-signatures and documents are automatically archived, ensuring their validity well beyond the lifecycle of the certificate or the certifying authority. Whenever needed, e-document information can easily be retrieved and downloaded. And as a bonus, the elimination of all that paper means greener business practices.
The benefits offered by Single Window affect both Governments and trade. For Governments, SW can ensure better risk management, improved levels of security and increased revenue yields thanks to enhanced trader compliance. Trading communities benefit from transparent and predictable interpretation and application of rules, as well as superior deployment of human and financial resources, resulting in enhanced productivity and competitiveness.
While there is still quite a way to go to move the trade industry into a fully digitised environment, paperless transactions and Single Window together will enable both shippers and transporters to more rapidly, securely, and efficiently handle increasing volumes of international trade.
The dematerialisation of customs formalities is the first step in the digitalisation of exchanges to accelerate and make reliable flows. GEFCO are already working on the archiving of customs documents with the aim of sharing information more effectively with stakeholders and reducing paper consumption.
Director Customs and Tax Representation at GEFCO