Connect with us

Opinion

The national single window: Paving the way for paperless trade

Published

on

By Mithara Fonseka and Kavishka Indraratna

In 2016, Sri Lanka ratified its Trade Facilitation Agreement (TFA) with the WTO and in 2017 a Secretariat was established for the National Trade Facilitation Committee to drive much needed trade reforms in the country. Currently, the rate of Sri Lanka’s implementation commitments under TFA stands at 34.9% with a timeframe ranging from 2017-2030. Reforms include the Trade Information Portal, streamlining customs processes and revamping the systems for post-clearance audit. However, progress of one of the key reforms, the National Single Window (NSW), has been stalled. Deviating from the initial time frame of completing the Single Window in December 2022, the target date has been delayed to 2030. The NSW, a globally recognised trading portal, acts as a one-stop shop for exporters and importers where customs documents, permits, registrations and other information can be submitted online at once. The definition of a Single Window, as provided by the UN/CEFACT Recommendation No. 33, is as follows: “A 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. If information is electronic, then individual data elements should only be submitted once”. Putting such a reform on the back-burner will only delay Sri Lanka’s transition to a system of streamlined, paperless trade processes and therefore acts as an impediment to local and foreign investment.

Why should Sri Lanka implement a NSW?

Sri Lanka has been underperforming in global trade rankings, where we sometimes rank in the bottom 50 countries. According to the Ease of Doing Business in 2020, in the trading across borders pillar, Sri Lanka ranks 96 out of 190 economies. While several of Sri Lanka’s indicators perform better than the South Asian average, there is significant room for improvement. When comparing with OECD standards, Sri Lanka takes 72 hours for border compliance regarding imports and 48 hours for export documentary compliance whereas the OECD average stands at 8.5 and 2.3 hours respectively. Lengthy customs procedures and multiple inspections impede efficiency. Meanwhile, we ranked 94 out of 160 countries under World’s Bank 2018 Logistics Performance index and 103 out of 136 for the World Economic Forum’s 2016 Enabling Trade index. Notably, one of the indicators from the Enabling Trade Index, the customs services index, which considers factors such as clearance of shipments via electronic data interchange and the separation of physical release of goods from fiscal control, we rank 116 out of 117 countries. A lack of transparency, inter-agency coordination and lengthy cumbersome processes contribute to Sri Lanka’s poor trade environment. An average trade transaction can involve over 30 different agencies and upto 200 data elements, a lot of which have to be repeated. There is thus an evident need to streamline trade processes through digitisation, creating a business friendly environment that supports small businesses as well as foreign investors.

A Background into the National Single Window

In 1989, the Government of Singapore introduced the world’s first NSW, known as Tradenet. It took two years for the model to become operational and has now become one of the most advanced models in the world. Since then, many countries have adopted similar models and a NSW has become a critical tool in facilitating efficient and paperless trade. The annual survey conducted by The United Nations on trade facilitation identified that almost 74% of countries surveyed in the Asia Pacific region have to some extent engaged in creating a NSW (this includes countries which are only in the pilot stage). While a NSW is universally known for promoting the transition from paper-based to electronic customs processing, each window developed by a country is unique and varies according to the context of the country. For example, in Chile and Malaysia, the NSW enables traders to submit their export and import declarations, manifests and their trade-related documents to customs authorities electronically. In Korea and Hong Kong, private sector participants including banks, customs brokers, insurance companies and freight forwarders are also connected through the portal.

Single entry, single submission, standardized documents and data, sharing of information (information dissemination), centralised risk management, coordination of agencies and stakeholders, analytical capability and electronic payment facilities are some of the key functions included in a Single Window. In Sri Lanka, the World Bank did several studies on the NSW, identifying different operational models, best practices and a final blueprint document was given to the government and Sri Lanka Customs (SLC) in July 2019. However, since then, there has been no news of progress. While many countries including Sri Lanka are keen to emulate Singapore’s pioneering model, a lack of clear targets and timelines deteriorate the chances of implementing such a system.

The Mutual Benefits of a NSW

Businesses in countries without an integrated trade system find it difficult to compete in the international arena given the time and money spent to simply get clearance. Streamlining the entire process from start to finish in a manner that’s comprehensive and transparent, sans bureaucracy has a number of positive effects for traders. It was estimated that Singapore’s TradeNet saved its traders around US$1 billion per year. Korea’s uTradeHub allowed its business community to save approximately US$ 818.9 million. These were savings from the use of e-documents, automated administrative work and information storage and retrieval with the use of ICT. A Single Window automatically simplifies the compliance requirements traders face. In Mozambique traders benefited from faster clearance times, where through the NSW, the time was reduced from 3 days to a few hours. Meanwhile, Thailand’s NSW transformed the customs clearance turnaround time (measured as per declaration) to 95% in 5 minutes. Using a single portal has enabled traders to avoid visiting multiple agencies and simply submit an application at their convenience from any location. NSW has supported businesses through the removal of unnecessary costs, time and red tape, factors which tend to act as key deterrents to small businesses as well as foreign enterprises.

The NSW system has similarly provided noteworthy cost-savings for government entities involved in trade. Singapore Customs, has claimed that for every US$1 earned in customs revenue, it only spends 1 cent, implying a profit margin of 9,900%. In Hong Kong, trade facilitation measures have provided them with HK$1.3 billion in annual savings. The NSW has also reduced revenue leakages which may arise through transit. For example, Mozambique is a transit country to Swaziland, South Africa, Zimbabwe, Zambia and Malawi. By expanding their NSW to include value added services such as GPS tracking of consignments in transit, automatic detection of breaches in consignment and deviation from assigned transit corridors the NSW prevents revenue leakages and the opportunity for corruption, maximising revenue collection. The NSW has further led to productivity and efficiency improvements. A Single Window has enabled authorities to handle a larger volume of applications with much more ease. Mozambique, which used to face infrastructural weaknesses, through the implementation of its single window, is able to handle roughly 1,500 custom declarations per day. Shifting to paperless customs processes would reduce costs for inventory and assist in improved resource allocation as personnel would not be required for trivial and mundane tasks such as preparation and cross checking of numerous documents. In totality, a fully digitised system provides government agencies with the means to do away with inefficiencies that hold back the speed of document processing, approval, communication and inspection stages. Further contributing to efficency, a NSW has also facilitated the dissemination of data through multiple agencies ranging from border control authorities, freight forwarders, customs brokers, shipping agents, banks and so on. As a result, there is improved inter-agency coordination and increased transparency.

Apart from a substantial increase in government revenue, the NSW will contribute to an improved business environment in Sri Lanka. The domino effects include an upward movement in the country’s global rankings, incentives for FDI and local business as well as a global recognition.

Driving forces for implementation

While the NSW on the surface seems like an IT-based innovation, it is rather a platform for inter-agency and private sector collaboration. As the NSW is a system which requires involvement from government, the private sector and the transport community, it is crucial to ensure inter-agency collaboration. Ensuring public-private sector participation, introducing mandates and a steering committee to oversee implementation is crucial in developing such a system. The system as a whole is one that constantly evolves with no end stage. It requires continuous maintenance, support, and enhancement. This should be supplemented by the appropriate legislation, disclosure and publishing, backed by training and airtight data security policies. Thus governance of the NSW needs to be executed appropriately so that new technologies, techniques and new modes of trade can be leveraged. In best performing nations, a Single Window is not considered a single system but rather “a combination of trade-related platforms that serve various trade communities and modalities”. This has enabled leading countries such as Singapore and Hong Kong to facilitate seamless trade by building an environment of interoperable trade systems.

Kavishka Indraratna is a Research Analyst at the Advocata Institute. She can be contacted at kavishka@advocata.org. Mithara Fonseka is a Researcher at the Advocata Institute. She can be contacted at mithara.advocata@gmail.com. The Advocata Institute is an Independent Public Policy Think Tank. Learn more about Advocata’s work at www.advocata.org.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Opinion

Govt. stubborn on organic manure from China

Published

on

According to media reports, it is evident that the Government is hell-bent on importing organic manure from the same company that supplied the first shipment, rejected by the Plant Quarantine officials of the Department of Agriculture (DOA). We are aware that US$ 6.9 million of Valuable Foreign Exchange (VFE) has been paid to this company (when the country is hard pressed for foreign currency) as compensation for the manure rejected due to obvious reasons viz. contamination with harmful microorganisms.

This VFE thus paid as compensation could otherwise have been used to import the much-needed chemical fertiliser. for which the farmers are rightfully clamouring. It was also reported that the Minister of Agriculture is planning to get a new SLSI Standard established, to facilitate this importation.

First things first, and it will be best for the authorities in the Ministry of Agriculture, and the Government, to sit for a while and study the Plant Protection Act No.35 of 1999, without losing time – better late than never. According to provisions and regulations under this Act, commercial quantities of organic manure cannot be imported to Sri Lanka. Only small samples of such materials can be allowed by the Director General of Agriculture, who is the implementing authority for the Plant Protection Act, and such samples can be used only for laboratory research work and cannot be added to the land.

As a retired officer, who worked in the Ministry of Agriculture, I am aware that no amendments have since been brought to the Plant Protection Act to change the provisions referred to above, and the regulations thereon. Furthermore, it is doubtful whether such amendments can ever be brought, since plant quarantine is an issue that cannot be compromised on the whims and fancies of Governments, and is subject to international covenants/agreements, as health issues pertaining to plant, animal and human life are involved.

Whatever standard that the SLSI establishes for organic manure imports, as per the request of the Minister of Agriculture, will have to comply with the aforesaid provisions of the Plant Protection Act. The so-called fresh shipment, if it is called organic fertiliser/manure, will necessarily contain a concoction of microorganisms, coming in bulk from a foreign environment to that of ours, and this itself could be disastrous, That is exactly why Plant Quarantine Services, the world over ( including Sri Lanka), are so strict in adhering to the relevant regulations. ( In this regard, we are all aware of the havoc created by the tiny Corona virus that, in fact, originated in China.)

In the event a fresh shipment comes, and if the Plant Quarantine officials act in the same manner as they acted when the first shipment came, strictly on scientific principles and in keeping with the regulations, the new shipment should get rejected if the material is really organic manure. So once again are we going to pay a massive compensation and lose VFE once more at this critical juncture; when we are in dire need of the same, to meet basic requirements? It is felt the Government should even at this late stage reconsider its policy on importing commercial quantities of organic manure/fertiliser, which no farmers ever wanted, and hence stop it forthwith, without getting this country into a further muddle.

The best is to produce organic manure/fertiliser on-farms as much as possible, due to the hassle of transporting over large distances, the way it was practiced by some farmers earlier, too, and use it as a soil re-conditioner; along with chemical fertiliser, which will give the much-needed plant nutrients in appreciable quantities, to achieve the required yield levels which will be sufficient to meet the national targets. Organic farming per se has been and can be practiced in Sri Lanka in niches over the years; it is nothing new and is known to give low/moderate yields at high cost, for special markets. Organic farming can never cater to our total national need, and the Government needs to understand this fact and reconsider its policy.

A.B. EDGAR PERERA

Retired Director/Agricultural Development

Ministry of Agriculture

Continue Reading

Opinion

Power Cuts: Engineers kept in the dark

Published

on

The above news item says even senior engineers of the CEB were kept in the dark about the power cut on Thursday, 13th Jan, despite Minister Gamini Lokuge assuring the country of uninterrupted supply. This gives the impression that there is no proper coordination among the engineers within the bCEB and the Ministry for Power. Added to this catastrophic situation, now enters another player, the Public Utilities Commission of Sri Lanka [PUCSL] making matters worse, where it insists approval for power cuts, according to a schedule, should be obtained from them.

The present power cut may be that the CEB has given the correct picture to PUCSL, and the information to the Minister may be by a section of engineers who play politics. The Minister should take the advice and information from the General Manager, and he should be held responsible for any false or incorrect information. It must also be said that there could be unexpected or unforeseen failures, which could alter the plans, and in such circumstances the GM, CEB could be excused. It is very unfortunate there is no unity among the engineers in the CEB, which has caused this unpleasant situation, embarrassing the Minister, the government, and placing consumers in a state of despair.

This difference in opinions among engineers in the CEB, reminds me of a similar situation in the 1980s, when the hydro reservoirs were running dry due to a severe drought. One section of engineers, to please the Minister, advocated running the turbines, expecting rains any time; while the other section advocated a power cut, saying it is dangerous and makes matters worse as the turbines could be damaged with dead wood and other objects dragging in with the flow.

This matter was brought before the Ministry, and the then Secretary to the Ministry for Power and Energy, the late James H Lanerolle, advised the Minister to approve a power cut which was turned down. Not being satisfied and being national minded, and in keeping with the responsibilities placed on him by the President who appoints Secretaries to Ministries to advise and guide Ministers, with the permission of the Minister made representations to the then President J.R.Jayewardene. A meeting with the President was arranged with engineers of both parties. On giving a patient hearing and understanding the gravity, the President turned to the Secretary and said [I can yet remember clearly as I too attended this meeting] “James, carry out your decision to shed power”. This should be a lesson to the present Secretaries of Ministries, not to play politics, and serve the President who had appointed them for the purpose mentioned above.

If there was no PUCSL to interfere, then the CEB would have briefed the Minister and the Secretary to the Ministry, and taken a correct decision. As the CEB has to serve two masters – PUCSL and Ministry – the two factions of engineers in the CEB act differently, one seeking PUCSL and the other the Minister.

I recall here the plea made by former Minister for Power, Dallas Alahapperuma, to President Gotabaya Rajapaksa, to remove PUCSL from interfering with the CEB, which the President on understanding the difficulties of the Minister to carry out his duties efficiently, safeguarding the government, rightly agreed and issued instructions accordingly. Unfortunately, Prime Minister Mahinda Rajapaksa, who was also the Finance Minister, overruled the President’s order and allowed the same procedure to follow.

It will be advisable for the present Minister for Finance, Basil Rajapaksa, to review, under the present confusing situation, which has brought Minister Lokuge to a questionable situation, and also the public having no faith in the promises made by government

G. A. D. SIRIMAL
Boralesgamuwa

Continue Reading

Opinion

Beginning of all things auspicious

Published

on

Happy Thai Pongal!

Cosmic phenomena have baffled mankind since the beginning of time. ‘Sun worshipping’ or ‘Heliolatry’ was one of the most widespread forms of worship in ancient times. Historical evidence suggests that sun-worship was practised not only by Indians but by Africans, Egyptians, Chinese and Indonesians. In fact, a remnant of sun-worship, one time-tested ritual survives to-date. Thai Pongal, celebrated today by Tamils the world over irrespective of region, caste or creed, is the only form of Sun worship in existence today.

Thai Pongal is the Hindu version of Thanksgiving, performed by offering the first portion of the harvest to the Sun God, Surya. The festival has more than just religious significance. Especially in the tropics, where the sun shines throughout the year, it is an abundant source of power. Consequently, for millennia the sun has been the driving force of agriculture. In fact, in the tropics any cultivation thrives on just sunlight and rain. In short the tropics owe its plenitude to the sun.

Thai Pongal marks the Indic solstice when the sun enters the 10th house of the Indian zodiac Capricorn. The ‘Thai’ in ‘Thai Pongal’ represents the month of January (the 10th month of the Tamil Calendar), which marks the beginning of the harvesting season for Hindus. ‘Pongal’, rice from the first harvest, cooked in milk and sweetened with jaggery, is an offering to the Sun God, Surya. Pongal also translates to ‘boiling over’ or ‘overflow’.

Thai Pongal is celebrated with great enthusiasm and eagerness by Tamils the world over. Indicative of the bumper harvest, celebrations are more pronounced in the tropics. Unlike in Sri Lanka, in Tamil Nadu, where Thai Pongal is said to have originated, it is celebrated for four days. The first day, January 14 this year, marks the beginning of multiple festivals, characterised by a scurry of activities, just as before Sinhala and Tamil New Year. Houses and yards are cleaned and trash from the previous year is burnt. In fact, so much burning takes place that Tamil Nadu pilots have complained of navigation difficulties due to smoke! The burning of trash is also figurative. It signifies unburdening of past year’s mental encumbrances and the expression of gratitude.

On the morning of the first day of celebrations Hindu women decorate the floor of their houses with Kolam, intricate patterns made from coloured rice flour. Rather than mere artistic expression or decoration, Kolam symbolises happiness and prosperity. Kolam is also used to demarcate the sacred area where the Pongal is prepared. Milk is heated until it boils over and rice and jaggery are added afterwards. The boiling over of milk symbolises abundance. Prepared within the parameters of the Kolam, in a clay pot using fire wood, Pongal is offered first to the senior most members of the family on banana leaves, after the prayers.

‘Mattu Pongal’, the third day of celebrations is dedicated to paying respect to cattle. Much like the Sun, cows are an integral part of tropical agriculture, not to mention Hindu culture. The cows work the fields year round, helping the farmer reap a plentiful harvest, by pulling the plough. In fact, before the advent of commerce, much of the early Hindu economy was based on milk trade. During the festive season cattle are garlanded, kumkum applied on their foreheads, horns painted and fed a mixture of jaggery, honey, banana and other fruits, referred to as venn pongal.

On the first three days most Hindus restrict themselves to a vegetarian diet. But on the fourth day, hill country Tamils of Sri Lanka start eating meat. The third day is spent visiting relatives. Bull fights, referred to as Jallikattu, are the main attraction in India on the second, third and fourth days. These take place out in the open and is considered an extremely dangerous and gruesome sport. Consequently, those who participate are considered gallant. The season consists of many other games and festivities such as bullock cart races, harvesting dances, music and festivities at temples.

Thai Pongal signifies prosperity and abundance in the new year. Hindus reap their first harvest in the month of ‘Thai’. As such, it is a financially beneficial and prosperous month. Hindus make wedding plans, plan to buy new property and assets and start new jobs during this month. The Tamil saying ‘Thai piranthal wali pirakkum’ means ‘with the beginning of January a new pathway is also paved’. This is the essence of Thai Pongal, which marks the beginning of all things auspicious for the Hindus.

Continue Reading

Trending