When trading across borders, you need to know whether a country’s customs procedures are going to help, or hinder, the safe and speedy delivery of your products.
To know which countries use technology to speed up the customs process for both exporter and importer, and understand why the adoption of such technology can give you greater efficiency gains.
The positive impact of digital customs platforms
Countries which have digitalized their customs procedures offer greater transparency and improved efficiency in daily trading processes.
Technology that shows good customs procedures
There has been a rapid rise in global trade in recent years. This has increased the demand for the coordination of different trade groups and organizations.1 The result is that many economies have adopted the single window platform.
The single window platform, explained
The United Nations Centre for Trade Facilitation and Electronic Business has defined a single window as a platform that lets trade stakeholders submit documentation and other relevant information through a single point of entry, in a standardized way to let them complete export, import, and transit procedures.
This online platform allows users to request approvals, authorizations and other certifications needed to import and export goods. Agencies integrated into the system have access to tax identification and business registration records. It is much more efficient, saving small, medium, and large businesses time, money, and red tape.
Countries which use a single windows platform have fewer delays, and greater transparency. This is good news for businesses who want to get their products to consumers quickly and securely.
Doing Business data also shows that technology speeds up the customs clearance process. For instance, traders in economies with fully operational electronic systems that let export and import customs declarations be submitted and processed online, spend less time on customs clearance.
For example Colombia is just one of the countries which has adopted the single windows system to ensure greater efficiencies at customs.
Colombia’s single window system
Colombia developed a single window system for foreign trade in the early 2000s to ensure the effective coordination of its exports. It is called Ventanilla Única de Comercio Exterior (VUCE).
Colombia’s single window system connects 21 public agencies and three private companies which provide e-signature certificates and legal information, with importers, exporters, customs agents, and brokers through an online platform.
Benefits of a single windows platform
Setting up a single windows platform is a clear indicator of an economy’s commitment to easing trade for importers and exporters. This is because setting up a single windows platform is costly to set up and run and takes about four years.
Despite the different uses and applications of single windows, the benefits outweigh the costs of developing a comprehensive framework integrating multiple trade actors. These benefits include:
- Improved revenue yields
- The adoption of control risk management techniques for governments
- Enhanced predictability
- Reduced costs
- Fewer delays for traders
Single window global success stories
Businesses trading with diverse countries worldwide have benefited from the time and cost savings that a single windows platform brings.
In many cases the time goods spend in customs has been reduced from days to just a few hours.
Economies who have digitalized their customs procedures have not only significantly reduced the time it takes to process goods, but have also encouraged businesses to trade with them.
Here are a few examples:
Since adopting the single windows platform, the customs custody time was reduced from six to eight days to four to six hours for shipments involving no declaration of prohibited items.
Adoption of a digital risk-based border inspection process has reduced the time goods spend in Albanian customs by 7% and boosted the value of imports by 7% between 2007 and 2012.
Singapore’s single window for trade, TradeNet, was one of the first single window systems put in place in the world. Today, TradeNet handles more than 30,000 declarations a day. It processes 99% of permits in just 10 minutes and receives all monetary collections through interbank transactions.
Singapore’s trading firms report savings of between 25% and 30% in document processing.
Sweden was also one of the first countries to introduce a national single window. Currently, the Swedish single window connects customs to the statistics bureau and to other important international trade actors.
Clearing goods in Sweden is easy and straightforward. The trader submits the customs declaration online. Then customs processes the relevant information. If a license or a permit from other agencies is required it is requested automatically through the single window.
Approximately 94% of customs declarations are electronic submissions, and approximately 12,000 companies and 7,000 citizens use it. The platform operates 24 hours a day, seven days a week and is free of charge.
Single windows: moving beyond national boundaries
Single windows platforms now cover entire geographic regions. This has led to a rise in electronically integrated regional systems.
The Association of Southeast Asian Nations (ASEAN)
The members of ASEAN countries aim to integrate the national single windows by allowing the electronic exchange of customs information and speeding up cargo clearance.
This regional single window is expected to reduce the overall cost of trading by 8%, with the largest savings coming from a reduction in documentation dispatch costs.
The Association of South East Asian Nations (ASEAN) members are:
- Brunei Darussalam
- Lao People’s Democratic Republic
- the Philippines
Technology gives businesses peace of mind
Increased trade digitization, which reduces human interactions at customs, creates fewer opportunities for bribery and fraud.
Businesses who trade with economies with computerized customs are much less likely to be affected by fraud from customs officials.
This is because computerized solutions for processing customs documents, and the general automation of customs clearance leaves little to the discretion of customs officials, thereby reducing opportunities for corruption.
The Philippines successfully countered corruption in its customs services by using modern technology to limit in-person interactions at customs posts and by imposing heavy penalties on corrupt officials.
As a result of these reforms, nearly 70% of imports to the Philippines are now processed through the green channel within just two hours. Similarly, single window systems which limit the monopoly power of customs agents can be implemented to deter corruption in customs services.
The automation and digitization of administrative systems largely eliminates the power monopoly of customs officials.
Businesses can be reassured by trading with a country whose government has adopted at single windows platform for its customs procedures. Digitalization means that a government is committed to speeding up the time products stay in customs, increasing efficiencies and reducing corruption. Modern technology has a generally positive impact on the entire trade process.