Connecting Supply Chain in the RegionPractices and Perspectives from PAA

Sung Heun HA (Rama)

Director of Global Cooperation

KTNET

25 September 2012

Agenda

2 PAA Cross Border Framework

3

1 About Pan Asian e-Commerce Alliance - PAA

4 Challenges

PAA Cross Border Paperless Trade Services

About PAA

Asia Economies and PAA Members

1. China : CIECC

2. Hongkong : Trade Link

3. Indonesia : PT EDI Indonesia

4. Japan : NACCS

5. Korea : KTNET

6. Macau : TEDMEV

7. Malaysia : DagangNet

8. Philippines : InterCommerce

9. Singapore : CrimsonLogic

10. Chinese Taipei : Trade Van

11. Thailand : CAT Telecoms

PAA Membership

• IT, Network Service Providers, authorized by

respective governments for electronic trade

declaration and permits, and providing B2B

and B2G local and cross border electronic

messaging services on supply chain,

logistics and financial transactions.

The PAA Mission• To enable secure and reliable transmission of trade and

logistics data and documents.

• To allow inter-connection of network services to provide

e-Commerce transaction application services for the

trade business community.

• To create a Pan-Asian portal to enable global B2B

connection and communication.

PAA Value Proposition

• Comprehensive PAA Legal Framework

– Safe and secure electronic documents exchange

– Mutual recognition of CAs/PKI

– Dispute resolution

• Facilitate Electronic Information Exchange,

with reliable service backed by

interconnection and service level agreement

– Reduce administrative costs

– Faster transactions

– Opportunities for improved operations, inventory

management and increased sales and revenues

PAA

Cross-Border

Framework

End User A End User B

PAA Policy

Authority

Certification

Authority B

Certification

Authority A

Club Agreement

CPS-A

Certificate

Policy

Country A Country B

CPS-B

PKI Mutual

Recognition

CA Service

Secure

Cross Border

Transaction

Services

Subscriber

Agreement-B

Recognition

Agreement

Subscriber

Agreement-A

Service

Provider A

Service

Provider B

Interconnection Agreement, SLA

PAA Legal Framework

PAA Agreements

• Subscriber Agreement with PAA Member

Services Agreement, within the jurisdiction of the

respective national eCommerce Act/Law, and

the Rules on the Admissibility of Electronic

Evidence in Court

• PAA Members' Inter-Connection and Service

Level Agreement

• PAA Club and Policy Agreement, CA/PKI Mutual

Recognition

Pan AsianCertificate

Policy

Evaluate

CPS against

Certificate

Policy

Confirm

CA’s Operation

is in accordance

with CPS

List ofAccredited

CA’s

Ac

cre

dit C

A’s

CommunityCA Certification

Practice Statement

(CPS)

Assess CA’soperationscomplieswith CPS

PKI Mutual Recognition

PAA Supported Documents

• Purchase Orders

• Advance Shipment Notice

• Packing List

• Commercial Invoice

• Bill of Lading

• Air Way Bill

• Sea Way Bill

• Shipping Order

• Delivery Order

• Trade Declarations

• Certificate of Origin

Customs

Clearance

(Status)

PAA Cross Border Scenario

Decla

ratio

n

Syste

m

PA

A M

em

ber (B

)

PA

A M

em

ber (A

)

AWB

Information,

INV, PL,

Export

Declaration

AWB, INV, PL

and

Declaration

Information

AWB

Information,

INV, PL,

Draft Import

Declaration

Exporting FA Importing FA

Customs Broker

Customs

System

Importing Customs

Customs

System

Exporting Customs

Export Declaration,

Manifest

Submission

Manifest,

Import Declaration

Submission

Customs

Response

Customs

Response

PAA Secure Doc Exchange :• Inter-connection Agreement•Legal Framework

Decla

ratio

n

Sys

tem

Cargo

Visibility

PAA

Secure Cross-Border

Transaction Services

H*

By integrating the paperless trade services into the H’s Supply

Chain Management System, all trade related documents and

information are sent to and received from partners into the system

automatically

L/C and other trade documents: 4,800/year, Mill Sheet and others:

2,400/year

Purchase

System

DBFor

Each Coil

DBFor

I/V, P/L, B/L info

Data for

Each CoilData for

Each CoilData for

Each CoilData for

Each CoilData for

Each Coil

Mill’s P/L

Invoice

Packing List

B/L Advice

ebXML, SSL

e-documents exchange over the

paperless trade platform

Paperless trade embedded e-SCM system

CASE 1 : e-SCM

16

Purchase Control

Purchase Plan

Inventory

Order Plan Order Plan

L/C L/C

Advance

Import

Report

P/O

Status

B/L Advice

Invoice

P/L

Mill Sheet Mill Sheet

B/L Advice

Application

for L/C

Order Plan

P/O

B/L Advice

Invoice

P/L

Mill Sheet

Advance

Import

Report

Status

Bonded

Transportation

Bonded

Transportation

Customs

Clearance

Tariff return

Customs

Clearance

Tariff return

L/C

ASP

EDIor

XML

Before

Bank Ministry Customs Bank Exporter Manufacturer CarrierKTNETERP Importer

II. PAA InitiativesCASE 1 : e-SCM

17

Purchase Control

Purchase Plan

Inventory

Order Plan

L/C L/C L/C

Advance

Import

Report

P/O

Status

B/L Advice

Invoice

P/L

Mill Sheet Mill Sheet

B/L Advice

Application

for L/C

Order Plan

P/O

B/L Advice

Invoice

P/L

Mill Sheet

Advance

Import

Report

Status

Bonded

Transportation

Bonded

Transportation

Customs

Clearance

Application

Tariff return

Customs

Clearance

Application

Tariff return

Order Plan

After

Bank Customs Bank Exporter Manufacturer CarrierKTNETERP Importer

II. PAA Initiatives

Ministry

CASE 1 : e-SCM

Mutual growth with Partners through the Increased Efficiency in Trade Business and Strengthened Business Ties

Direct Cost Saving : $ 1 Million / Y

Stable supply chain management

•Transparent work process from Planning to

Production

Less Human Resource

•$ 1 Bil./8 Staffs (2003)

$ 5 Bil./4 Staffs (2012)

Secure the Business with HYSCO

•Pre-order based production

High level customer service

•Extension of same service to other Korean

Customers => Hyundai Motors, Hyundai

Heavy Industry

Enhance work efficiency

•Less mistakes from documents handling

•Lower work load from more work volume

Less System Development and Management Cost

•PAA Standard e-documents and Web ASP service

Benefits for H* and Trade Partners

II. PAA InitiativesCASE 1 : e-SCM

E-C/O: APEC ECSG Pathfinder Project

Dec. 2004, preliminary-meeting between MOTIE (public

sector), KITA and KTNET(private sector) of Korea and BOFT

(public sector) and Trade-Van (private sector) of Taiwan

province of China

April 2005 and May 2006, the 1st and 2nd bilateral meeting

- Mutual agreement on the implementation of the cross border

ECO exchange project using PAA framework

Nov 2008, the 3rd bilateral meeting

- Signing of MOU for cross border ECO service

March 2010, official launch of ECO service

II. PAA InitiativesCASE 2 : E-Certificate of Origin

Paper CO Scenario [Korea ► Taiwan, China]

Repository

KTNET

Repository

KCCI

CO

APPORG

ECO

CERTIF

Exporter

CO APP

ECO (for print)

Customs

Importer

Send Inv, P/L, Paper CO to Importer

Korea Taiwan, China

Customs Broker

Pass the paper CO to Customs Broker

Import

Declaration

Supplement

Paper CO

Supplement

Paper CO

National

Treasury

Agency

Verify authenticity of

paper CO

Trade-Van

Declaration

Taiwan province

Mission office in

Korea

CO for Seal and

Certification

ECO Scenario [Korea ► Taiwan, China]

Exporter

Repository

KTNET

Repository

Trade-VanCO APP

ECO (for view)

Inv, P/L

(specify ECO Number)

Inv, P/L,

Attach

ECO from

repository

Inv, P/L, ECO Importer

CO

APPORGECO

CERTIF

KCCI

Customs

Import Declaration

ECO confirmed by importer

Import

DeclarationCustoms Broker

Sign to confirm ECO

Assign Customs Broker

Generate Import

Declaration Data

ECO Enquiry on KCCI Website

With ID and Password

Korea Taiwan, China

Benefits to Exporters/ImportersExporter

Save time and costs (courier express US$23) in applying and

sending over paper CO

No need to get a stamp/seal on the CO from Taipei Trade

Representative Office in Korea

save tremendous time (in average 3 days) and costs (US$

17 per stamp, US$20-40 of travel cost)

Transmit cross border documents in a secure online

environment

Better service to buyers

Importer

Speed up customs clearance process

Expedite cargo pick up saving warehouse cost

Guarantee of authentic CO

CargoStatus Information

(with Export Manifest information)

Trucker

TerminalExport

Declaration &

ManifestLoading

Departure

ArrivalDischarging

Import

Declaration

&Manifest

Bonded

Warehouse

Trucker

Query by B/L number or Cargo Number

CIECC KTNET

DLN TJ

NB

QD KCS (All Korea Ports)

Origin Destination

Web Service

Forwarder Web

Trader

Web Service

Trader

Forwarder Web

* Both Inbound and Outbound Model is applicable

Korea-China Cargo Visibility Project (II)Example of Korea-China Cargo Tracking

CASE 3 : Cargo Visibility Service

Global Cooperation (APEC, ASEAL, AFACT, UN and etc..)

B2B2G Services

Pre-Declaration

E-Manifest

…

B2G Services

E-C/O

eSPS

….

B2B Services

Secure Cross Border Transaction Service

Value

Added

Services

P/O

Inv

P/LOrder

Confirmation

Certificate

VisibilityFinancial Settlement

PAE …

Etc..

ASN

Security (PKI) XML Document Networking (ebXML)

PAA Infrastructure

PAA Legal Framework

PAA as a Platform – PAA’s PAAS

PAA as a Platform – PAA’s PAAS

Quotation/

BiddingOrder

Placement

Credit

Check/Trade Performance Report

Business Matching and Negotiation

Import

Declaration

Cargo

Tracking

Customs DutyImport Permit

Potential members’ services to PAA

current services

Trade

Financing

HS Code

ClassificationFTA Analyzer eCO Issuance

Credit

Insurance

Marine

Insurance

Shipping

DocumentsExport

Declaration

Import Procedures

Export Procedures

RFQ

Freight

Mgnt

eMarketPlace

eBL/eNegotiatioin

Payment

Challenges

Issues and Challenges

Capacity

Gaps

among

the Parties

Common

International

Standards

Harmonization of

Different

Legal

Framework

Cooperation

between

Public and

Private Sectors

Lack of

Coordination

Mechanism

Five major challenges to overcome

Adoption of common international standards into national paperless

trade systems

Domestic legal framework in align with international model laws

and conventions

More rigorous capacity building program at regional level with

reciprocal capacity building activities and support

Dynamic platform where both public and private sectors can openly

share their views and concerns and communicate readily

Regional arrangement for the recognition and facilitation of cross-

border electronic documents and data

Recommendation

During the 45th meeting of PAA Steering Committee in Manila, Philippines, the PAA had the opportunity to discuss the proposed Regional Agreement/Framework Agreement on Facilitation of Cross-border Paperless Trade for the Asia Pacific Region by UNESCAP and are encouraged by the renewed engagement by UNESCAP members on paperless trade.

The PAA has been involved in a broad range of trade-related cross-border exchange of electronic data and documents. We would like to express our strong collective commitment to support the Regional Agreement/Framework Agreement on Facilitation of Cross-border Paperless Trade for sustainable intraregional trade facilitation.

PAA Declaration