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The national single window: Paving the way for paperless trade

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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.



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Opinion

‘CEB engineers should be ashamed of power cuts’

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The Secretary, Energy User’s Association, Sanjeewa Dhammika seems to be confused or uninformed as regards his statement that engineers of the CEB should be ashamed of power cuts. He says, ‘They must implement the Long-Term Generation Plan. They too have scuttled the schemes that could have helped to overcome the current situation…’ These accusations should be squarely placed on the government and the Public Utilities Commission of Sri Lanka [PUCSL], which torpedoed the Long Term, Least Cost Generation Plan when at first PUCSL objected to the plan for having a coal plant included and it took a long period to settle the issue. Next, President Gotabaya Rajapaksa boastfully announced the cancellation of the additional coal plant at Norochcholai and set a target of 70% renewable sources of energy by 2030 without consulting the CEB as to its capabilities in reaching the target. When I say capabilities, I mean the administrative structure, the available resources and what is needed, etc. On top of that, the then Minister for Power and Energy, Ranjith Siyambalapitiya, interfered in awarding the tender by over four years for the construction of the Kerawalapitiya LNG power plant. If that project was approved in time, perhaps the CEB could have averted power cuts. Keep all that aside, the most important factor is the non-availability of US dollars to purchase fuel which caused the shut down of the Biyagama oil refinery and also the refusal of CPC to supply fuel to CEB due to non-payment, running into billions.

My sincere advice to the Secretary to Energy Users Ass. Jeewaka Dhammika is do not mislead consumers without knowing facts.

What I have stated above is what I have gathered from newspaper reports and could be refuted or confirmed by CEBEU or any other.

G. A. D. Sirimal
BORALESGAMUWA

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Opinion

SL Volunteer Air Force in counter-insurgency ops in 1971

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This article was written by the late Sqn. Ldr. J.T. Rex Fernando (S. L.A.F.Retd.), First Commanding Officer Sri Lanka Volunteer Air Force, four years ago.

The contribution made by the Sri Lanka Air Force throughout five and a half decades, to safeguarding the country’s airspace and thereby the territorial integrity, has been given wide coverage in the print and electronic media. Recounting its illustrious history, it can look back with pride and satisfaction at its enviable record of operational successes, its reputation and also its contribution towards the development of the country’s non-military fields.

While recounting the vital role it played in crushing the abortive armed insurrection of 1971, it is only appropriate to recall the supportive role of the Sri Lanka Volunteer Air Force.

Armed insurrection

The armed insurrection of April 1971, to overthrow the lawfully constituted United Front Government, demonstrated clearly the tragic unpreparedness of the Government’s security forces at the time to deal promptly with a major, bloody uprising as the one the insurgents launched. On the one hand, there were not enough arms and ammunition. On the other hand the strength of the security forces was far below that which was required to sustain a major operation. The Air Force in particular had to perform a number of tasks in the first difficult days of the campaign with the Regular Force and found the need to supplement the relatively small Regular Force.

On April 24 Prime Minister Sirimavo Bandaranaike said, “On the 5th of April we found that we had inadequate weapons, ammunition and aircraft to meet a sustained threat over a long period of time by the terrorist insurgents.” The Prime Minister made this point again in July when she told the parliament that, “The week immediately following the 5th of April was an extremely vital week and the armed forces and the police had to struggle against many odds during this period.” The Air Force had to expand and expand fast. Likewise, other sections of the security forces had to be put in a state of preparedness to deal with any future threat to the country’s security. The need of the hour, when the country was facing a considerable threat from terrorists, was to strengthen the Armed Forces and the Police. It was this pressing need that led to the formation of the Sri Lanka Volunteer Air Force.

Establishment

To Air Vice Marshal Paddy Mendis, the establishment of the volunteer Air Force was the realisation of a cherished dream. For over 20 years, since inauguration of the Volunteer Force had never been given serious consideration. With the pressing requirement to supplement the regular strength, the formation of the Volunteer Air Force was formally authorised by a proclamation by the President on 14 April, 1971.

Appointed the first Commanding Officer, I was directed by A.V.M. Mendis to proceed with the setting up of the infrastructure, recruitment, training and deployment as a matter of utmost priority. The task itself was challenging and unenviable. However, with the guidance of the Commander and the continuous support of the Air Force Board of Management and with the exemplary dedication and admirable commitment of my adjutant Flt. Lt Mani Seneviratne, the task was pursued and successfully accomplished.

Role

The role of the Volunteer Force was essentially to assist the Regular Force in its primary and internal security duties. With more volunteers employed on internal security duties the skilled regular tradesmen were able to concentrate on their specialist technical and other skilled duties.

Organisation

On the basis of their functional role the Volunteer Force was organised broadly into Ground Operational Squadrons, Work Services Squadrons and Air Operational Squadrons. Despite the relatively short period of training and the limited ‘on the job training’ Volunteer personnel contributed considerably to the Air Force tasks. Apart from internal security duties and general operational tasks Volunteer personnel were employed in almost every field of Air Force activity, on flying duties, airfield construction, mechanical transport operations and maintenance, engineering duties, logistics and catering duties and administrative, clerical, medical and other miscellaneous service duties. The Air Field Construction Regiment was organised to undertake major construction projects and maintenance commitments. The Volunteers working side by side with the regulars assimilated the service form and gained confidence. The ‘esprit de corps’, the cordiality and friendship that prevailed contributed greatly to the success it achieved.

Recruitment and training

Recruitment commenced almost immediately. After the promulgation, the first batch of Volunteer Officers and Airmen commenced their initial Ground Combat training at Diyatalawa on April 23, while the Volunteer pilots at the same time commenced flight training at the No. 1 Flying Training School, China Bay. The task of the Instructors was not an unenviable one. They had to train personnel recruited from various walks of life as combatants capable of operating their intricate flying machines and coping with various operational and non combatant duties within a short period. The full, authorised cadre was recruited and training completed by the end of May.

The initial training courses were so designed to mould the trainees into alert, efficient and well disciplined members of the Air Force; proficient in all basic aspects of ground combat and other general responsibilities; capable of working with confidence, side by side with their regular counterparts in a supporting role. All Volunteer trainees, within the short training period, were trained adequately in varied service aspects, among which were drill, weapons training, field-craft and tactics, map reading, jungle training and watermanship, Air Force Law, and afforded an adequate knowledge of the organisation of the Air Force, along with first aid and fire fighting. Special emphasis was placed on physical fitness and the standard of physical fitness gradually raised, training them to take on the role of combatants irrespective of their specialised trades. Subsequent to initial combat training, trainees were afforded ‘on the job training’ on their particular trade duties.

Among the officers, specialists recruited were General Duties Pilots who were required to supplement the meagre number of Regular Pilots who were continuously flying day and night on operational and Air Transportation commitments, since the outbreak of the terrorist offensive. The Volunteer Pilots were intended to provide some relief though it was not possible to immediately employ most of them on operational duties. While very few were experienced pilots, most of the selected pilots had previous experience in light trainee aircraft only. After a rapid training course on the basic Chipmunk, then converting to the Dove and Heron aircraft, they were able to be of assistance to the Regular Pilots.

Spontaneous response

With the formation of the Volunteer Air Force there was an encouraging and unprecedented response from persons of all walks of life to join the Force. Reputed professionals of various disciplines as well as highly skilled and semi killed persons were all driven by a sense of patriotism and yearning to contribute their skills to preserve sovereignty and national integrity. While a great number of professionals volunteered and served with distinction, it is appropriate to mention the names of some in appreciation and expression of gratitude for their service, and also to highlight the multiplicity of disciplines and professions that made up the Volunteer Air Force. Medical professionals, Senior Consultant Late Dr. T.H. Amarasinghe, Consultant Surgeon Dr. S. Maheshwaran, Dental Surgeon Dr. S. Rajapakse, experienced and reputed pilots Susantha Jayasekara and David Peiris, Consultant and Chartered Cost Accountants late Dayalan Tharmaratnam and S. Balakur, Registered Auditor R. Ramachandra and Chartered Management Consultant, Kuda Liyanage, Banker Nimal Gunatunge, Chartered Civil Engineers Mervyn Wijesinghe and Ben Navaratne, Chartered Architect Mano Kumarasingham, Attorney at Law and Human Resources Consultant Tilak Liyanage and Lucky Moonamale, Civil Servant Mervyn Koch, Management Specialist Mahes Goonathilake, Business entrepreneurs late Ed Nathanielz, late Bevis De Silva, Upali Gunesekera and late Harold Pilapiya, reputed entertainer Desmond De Silva and National Cricketers Brian Obeysekera, Tony Opatha and Nihal De Zoysa are a few noteworthy examples.

All these gentlemen with a great number of others served the force with distinction. Most of them did so despite personal inconvenience, disruption of their regular employment, business and domestic life since most of them were stationed in remote and uncongenial locations such as Ridiyagama, Weerawila, Weeraketiya and Hambantota.

Entry of women

The entry of women into the Volunteer Force can be considered a unique feature of the formulation of the Volunteer Force. Armed Services, an exclusive preserve of the men, opened its doors to the women. The four pioneering women on graduating on 4 October, 1972 were engaged in secretarial duties and duties associated with tourist flying.

Continued mobilisation

It must be accepted that when personnel initially enlisted in the Volunteer Force, they did not anticipate to be mobilised for prolonged periods of time. Especially those with permanent employment and holding responsible positions and those in the government sector encountered hardships as a result of continued mobilisation and deployment in remote areas. Some of them were gradually absorbed into the Regular Force, and some left after fulfilling an obligation on cessation of hostilities.

Contribution

In 1973 just two years after the formation of the Volunteer Force, the Commander of the Air Force AVMP. H. Mendis, with a sense of great satisfaction, referring to the Volunteer Force asserted, “As a result of hard work and dedication to duty of the highest order, the Volunteer Force has distinguished itself in combat, security, administrative, operational and constructional duties. Your units are based in many locations within the country and you have carried out your duties exceptionally well.”

Every Volunteer was conscious that he or she had a vital role to play in the defence of the country. The sense of dedication and devotion to duty inculcated by the Regular counterparts was indeed the most encouraging feature of the Volunteer Organisation.

These gentlemen who spontaneously responded to a call to serve the country in her hour of peril, maintained their enthusiasm and displayed remarkable dedication to duty. Their service was of help to the Air Force at a time the country was plunged into bloody chaos. It is only appropriate to recall their contribution and express our appreciation of their services.

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Opinion

Priority need to focus on Controlling Serious Economic Crimes

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Open letter to President Gotabaya Rajapaksa

The Ministry of Defence has advertised five vacancies for the “Recruitment as Reserve Assistant Superintendents of Police to the Ministry of Defence, affiliated to the Sri Lanka Police, skilled professionals to become proud members of the Ministry of Defence, dedicated to the sovereignty, unity and territorial integrity of Sri Lanka as well as to public safety and to play a superior role for the nation. These recruits will function as Cyber and Forensic Analyst, Geo-Political and Strategic Analyst, Counter Terrorism and Violent Extremism Analyst, Economic Analyst and Statistical Analyst (the last two covering security perspectives regarding national security)”. Any justified decision to strengthen the knowledge and skills based professional capability of existing human resource of the state is a welcome move, so long as the recruits have in addition to the specified qualifications, requisite commitments to best practice professional standards, ethics, correct attitudes and values.

The caring civil society fervently hopes, in accord with your stated commitments in the manifesto and the several public pronouncements that followed your election as the President, that you, with the support of your Cabinet colleagues and the top officials of the executive, will similarly focus on the essential priority need to focus on controlling serious economic crimes, which can easily debilitate the financial integrity, fiscal and monetary stability and solvency of Sri Lanka; and if allowed unabated will destabilise the economy and prevent the realisation of the goals of splendour and prosperity.

The optimum operational environment to assure financial integrity minimizing serious economic crimes is by having effective laws, regulations, policies, systems, procedures, practices and controls, with efficient and effective independent oversight mechanisms, enforcements, investigations and prosecutions, followed by independent justice systems with penal sanctions and recovery of proceeds of crime. The critical drivers of such a system are independence, capability and professionalism of supporting human resources in the entire chain. It is however quite evident from many case studies that the systems controlling financial integrity of Sri Lanka fails to meet required standards of effectiveness, due mainly to the lack of competent and committed professionals in the chain engaged in independent oversight mechanisms, enforcements, investigations and prosecutions. Due to this incapacity the independent oversight control, enforcement, investigation, prosecution and punishment of offenders of money laundering, transfer pricing, securities offenses, bribery, corruption, financial fraud, organised crimes, drug trafficking, smuggling, and avoidance of taxes/ excise and customs duties are ineffective; and more importantly the recovery of proceeds of these crimes eventually fail and are thus unable to restore the state revenues leaked and state assets stolen or defrauded.

Civil society looks to you as the President, to take early action to strengthen the structures, systems, laws and regulations along with the capacity of the resource persons engaged in the independent oversight control and enforcement of mechanisms; and thereby minimise serious economic crimes system wide and facilitate successful recovery of proceeds of crime. In the above context it is suggested that you pursue the undernoted strategic action steps under your direct leadership supervision:

* Seek Cabinet approval to set up an Enforcement Directorate similar to that of India under the supervision of the Inspector General of Police, reporting to an Independent Public Commission made up of three members, comprising of a high integrity competent retired Appellate Court Judge, a retired Senior Officer of the Auditor General’s Department and a retired Senior Officer of the Central Bank.

* Enforcement Directorate to be entrusted with the mission of minimizing the identified serious economic crimes systems wide; enhancing oversight mechanism and controls system wide and where suspected that any such crimes having taken place professionally investigating and prosecuting, optimizing recovery of proceeds of crime

* Seek technical support in setting up the Enforcement Directorate from the Financial Integrity Unit of the World Bank and its affiliates Financial Action Task Force, UN Office on Drugs and Crime and the Stolen Asset Recovery Initiative with extended human resource training and development support from bi lateral supporting countries and other specialized agencies

* Recruit competent and highly professional staff for the Directorate, similar to the staff recruited to the Defence Ministry; and support them with requisite resources, knowledge, skills, systems, data bases, best practices and technical and investigation assistance linkages

* Enact essential legal and regulatory reforms, commencing with the early enactment of the Proceeds of Crime Act draft sent to the previous regime for cabinet endorsement

* Enhance the capability of the prosecutors of the Directorate to successfully prosecute serious economic crimes and judges to effectively support the judicial processes connected therewith

* Make it a compulsory requirement of all state remunerated persons to adopt the ethical standard to report to the Directorate any known or suspected non compliances with laws and regulations

Trust you and your advisory team will give due consideration to this submission

Chandra Jayaratne

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